We at Insider Monkey have gone over 700 13F filings that hedge funds and prominent investors are required to file by the government. The 13F filings show the funds’ and investors’ portfolio positions as of September 30. In this article we look at what those investors think of Exa Corp (NASDAQ:EXA).
Exa Corp (NASDAQ:EXA) investors should be aware of a decrease in enthusiasm from smart money of late. EXA was in 7 hedge funds’ portfolios at the end of the third quarter of 2015. There were 8 hedge funds in our database with EXA holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as ASA Gold and Precious Metals Ltd (NYSE:ASA), Gaiam, Inc. (NASDAQ:GAIA), and Blue Capital Reinsurance Holdings Ltd (NYSE:BCRH) to gather more data points.
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At the moment there are plenty of methods stock traders have at their disposal to assess publicly traded companies. Two of the less known methods are hedge fund and insider trading interest. We have shown that, historically, those who follow the best picks of the best investment managers can outperform the S&P 500 by a healthy amount (see the details here).
Now, we’re going to analyze the recent action surrounding Exa Corp (NASDAQ:EXA).
What have hedge funds been doing with Exa Corp (NASDAQ:EXA)?
At the end of the third quarter, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -13% from the second quarter. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, George Soros’s Soros Fund Management has the number one position in Exa Corp (NASDAQ:EXA), worth close to $13 million, comprising 0.2% of its total 13F portfolio. The second most bullish fund manager is John H Lewis of Osmium Partners, with a $2.4 million position; 2.7% of its 13F portfolio is allocated to the company. Remaining members of the smart money that are bullish include Michael Murphy and Daniel Donoghue’s Discovery Group, Anand Parekh’s Alyeska Investment Group and Jim Simons’s Renaissance Technologies.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: PEAK6 Capital Management. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because none of the 700+ hedge funds tracked by Insider Monkey identified EXA as a viable investment and initiated a position in the stock.
Let’s check out hedge fund activity in other stocks similar to Exa Corp (NASDAQ:EXA). We will take a look at ASA Gold and Precious Metals Ltd (NYSE:ASA), Gaiam, Inc. (NASDAQ:GAIA), Blue Capital Reinsurance Holdings Ltd (NYSE:BCRH), and NV5 Holdings Inc (NASDAQ:NVEE). This group of stocks’ market values match EXA’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ASA | 4 | 19794 | 1 |
| GAIA | 8 | 35837 | -1 |
| BCRH | 4 | 4802 | 0 |
| NVEE | 6 | 12308 | 0 |
As you can see these stocks had an average of 5.5 hedge funds with bullish positions and the average amount invested in these stocks was $18 million. That figure was $20 million in EXA’s case. Gaiam, Inc. (NASDAQ:GAIA) is the most popular stock in this table. On the other hand ASA Gold and Precious Metals Ltd (NYSE:ASA) is the least popular one with only 4 bullish hedge fund positions. Exa Corp (NASDAQ:EXA) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard GAIA might be a better candidate to consider a long position.
