A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended March 31st, so let’s proceed with the discussion of the hedge fund sentiment on HireQuest, Inc. (NASDAQ:HQI).
Is HQI a good stock to buy? Hedge funds were taking a bullish view. The number of bullish hedge fund bets went up by 2 lately. HireQuest, Inc. (NASDAQ:HQI) was in 3 hedge funds’ portfolios at the end of March. The all time high for this statistic was previously 2. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that HQI isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 1 hedge funds in our database with HQI positions at the end of the fourth quarter.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Michael Gelband of ExodusPoint Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $28 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind we’re going to take a gander at the fresh hedge fund action regarding HireQuest, Inc. (NASDAQ:HQI).
Do Hedge Funds Think HQI Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 200% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards HQI over the last 23 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Bandera Partners, managed by Gregory Bylinsky and Jefferson Gramm, holds the most valuable position in HireQuest, Inc. (NASDAQ:HQI). Bandera Partners has a $4.3 million position in the stock, comprising 1.7% of its 13F portfolio. Sitting at the No. 2 spot is Millennium Management, managed by Israel Englander, which holds a $0.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. In terms of the portfolio weights assigned to each position Bandera Partners allocated the biggest weight to HireQuest, Inc. (NASDAQ:HQI), around 1.71% of its 13F portfolio. ExodusPoint Capital is also relatively very bullish on the stock, designating 0.003 percent of its 13F equity portfolio to HQI.
Now, key money managers have jumped into HireQuest, Inc. (NASDAQ:HQI) headfirst. Bandera Partners, managed by Gregory Bylinsky and Jefferson Gramm, assembled the most valuable position in HireQuest, Inc. (NASDAQ:HQI). Bandera Partners had $4.3 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $0.2 million investment in the stock during the quarter. The only other fund with a brand new HQI position is Michael Gelband’s ExodusPoint Capital.
Let’s also examine hedge fund activity in other stocks similar to HireQuest, Inc. (NASDAQ:HQI). These stocks are LG Display Co Ltd. (NYSE:LPL), KVH Industries, Inc. (NASDAQ:KVHI), Ames National Corporation (NASDAQ:ATLO), LogicBio Therapeutics, Inc. (NASDAQ:LOGC), PCB Bancorp (NASDAQ:PCB), Hurco Companies, Inc. (NASDAQ:HURC), and Bluerock Residential Growth REIT Inc (NYSE:BRG). This group of stocks’ market values match HQI’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LPL | 9 | 21826 | 2 |
| KVHI | 5 | 15989 | 1 |
| ATLO | 3 | 11589 | 0 |
| LOGC | 6 | 85612 | -2 |
| PCB | 4 | 29911 | -1 |
| HURC | 7 | 41714 | 4 |
| BRG | 7 | 7011 | 4 |
| Average | 5.9 | 30522 | 1.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.9 hedge funds with bullish positions and the average amount invested in these stocks was $31 million. That figure was $5 million in HQI’s case. LG Display Co Ltd. (NYSE:LPL) is the most popular stock in this table. On the other hand Ames National Corporation (NASDAQ:ATLO) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks HireQuest, Inc. (NASDAQ:HQI) is even less popular than ATLO. Our overall hedge fund sentiment score for HQI is 37. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Hedge funds clearly dropped the ball on HQI as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. A small number of hedge funds were also right about betting on HQI as the stock returned 19% since Q1 (through June 11th) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
