You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.
Immersion Corporation (NASDAQ:IMMR) investors should be aware of a decrease in hedge fund interest recently. 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 Las Vegas Sands Corp. (NYSE:LVS), Landec Corporation (NASDAQ:LNDC), and Stage Stores Inc (NYSE:SSI) to gather more data points.
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According to most investors, hedge funds are perceived as underperforming, old financial tools of years past. While there are more than 8000 funds trading today, We hone in on the top tier of this club, around 700 funds. These investment experts command the lion’s share of all hedge funds’ total capital, and by shadowing their inimitable picks, Insider Monkey has come up with numerous investment strategies that have historically outstripped Mr. Market. Insider Monkey’s small-cap hedge fund strategy outstripped the S&P 500 index by 12 percentage points per year for a decade in their back tests.
Keeping this in mind, we’re going to view the recent action encompassing Immersion Corporation (NASDAQ:IMMR).
How are hedge funds trading Immersion Corporation (NASDAQ:IMMR)?
At the end of the third quarter, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of -5% from one quarter earlier. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Richard Mashaal’s Rima Senvest Management has the number one position in Immersion Corporation (NASDAQ:IMMR), worth close to $49.9 million, accounting for 3.6% of its total 13F portfolio. The second largest stake is held by Spencer M. Waxman’s Shannon River Fund Management, with an $29.2 million position; 5.4% of its 13F portfolio is allocated to the company. Some other professional money managers with similar optimism encompass Christopher Zepf and Brian Thonn’s Kingdom Ridge Capital, and Chuck Royce’s Royce & Associates.
Seeing as Immersion Corporation (NASDAQ:IMMR) has witnessed a declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there were a few money managers that elected to cut their positions entirely by the end of the third quarter. It’s worth mentioning that Marc Majzner’s Clearline Capital cut the biggest investment of all the hedgies monitored by Insider Monkey, totaling an estimated $4 million in stock, and Andy Redleaf’s Whitebox Advisors was right behind this move, as the fund dumped about $0.4 million worth. These transactions are important to note, as total hedge fund interest dropped by 1 funds by the end of the third quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Immersion Corporation (NASDAQ:IMMR). These stocks are Las Vegas Sands Corp. (NYSE:LVS), Landec Corporation (NASDAQ:LNDC), Stage Stores Inc (NYSE:SSI), and Ardmore Shipping Corp (NYSE:ASC). All of these stocks’ market caps resemble IMMR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LVS | 8 | 23749 | 1 |
| LNDC | 13 | 65926 | 5 |
| SSI | 12 | 8821 | -2 |
| ASC | 10 | 29163 | -4 |
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was just $32 million, compared to $132 million in IMMR’s case. Landec Corporation (NASDAQ:LNDC) is the most popular stock in this table with a total of 13 funds reporting ownership of the company’s shares. On the other hand Las Vegas Sands Corp. (NYSE:LVS) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks, Immersion Corporation (NASDAQ:IMMR) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
