How do we determine whether Incontact Inc (NASDAQ:SAAS) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
Is Incontact Inc (NASDAQ:SAAS) a buy, sell, or hold? The smart money is taking a bearish view. The number of long hedge fund positions fell by 8 in recent months. Incontact Inc (NASDAQ:SAAS) was in 12 hedge funds’ portfolios at the end of the third quarter of 2015. There were 20 hedge funds in our database with Incontact Inc (NASDAQ:SAAS) positions 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 Stock Building Supply Holdings Inc (NASDAQ:STCK), Acacia Research Corporation (NASDAQ:ACTG), and DTS Inc. (NASDAQ:DTSI) to gather more data points.
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In the eyes of most stock holders, hedge funds are perceived as slow, outdated financial vehicles of the past. While there are over 8000 funds in operation at present, our experts choose to focus on the bigwigs of this group, about 700 funds. These investment experts preside over the majority of the hedge fund industry’s total capital, and by paying attention to their inimitable picks, Insider Monkey has found various investment strategies that have historically defeated Mr. Market. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 12 percentage points per annum for a decade in their back tests.
With all of this in mind, we’re going to view the new action surrounding Incontact Inc (NASDAQ:SAAS).
How are hedge funds trading Incontact Inc (NASDAQ:SAAS)?
At the end of Q3, a total of 12 of the hedge funds tracked by Insider Monkey were long in this stock, a drop of 40% from the previous quarter. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Portolan Capital Management, managed by George McCabe, holds the most valuable position in Incontact Inc (NASDAQ:SAAS). Portolan Capital Management has a $27.3 million position in the stock, comprising 3.6% of its 13F portfolio. The second largest stake is held by SG Capital Management, managed by Ken Grossman and Glen Schneider, which held a $10.8 million position; the fund has 2.4% of its 13F portfolio invested in the stock. Some other hedgies that hold long positions include Matthew A. Weatherbie’s Weatherbie Capital, Constantinos J. Christofilis’ Archon Capital Management and Mark Coe’s Coe Capital Management.
Because Incontact Inc (NASDAQ:SAAS) has witnessed declining sentiment from hedge fund managers, it’s safe to say that there is a sect of money managers that elected to cut their positions entirely at the end of the third quarter. Intriguingly, Clifford Fox’s Columbus Circle Investors dropped the largest stake of all the hedgies watched by Insider Monkey, valued at an estimated $19.4 million in stock, and Josh Goldberg of G2 Investment Partners Management was right behind this move, as the fund sold off about $4.4 million worth. These moves are important to note, as aggregate hedge fund interest fell by 8 funds at the end of the third quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Incontact Inc (NASDAQ:SAAS) but similarly valued. These stocks are Stock Building Supply Holdings Inc (NASDAQ:STCK), Acacia Research Corporation (NASDAQ:ACTG), DTS Inc. (NASDAQ:DTSI), and Gores Holdings Inc (NASDAQ:GRSHU). This group of stocks’ market values resemble Incontact Inc (NASDAQ:SAAS)’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| STCK | 11 | 87235 | 1 |
| ACTG | 11 | 62153 | -5 |
| DTSI | 12 | 94946 | -1 |
| GRSHU | 16 | 156178 | 16 |
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $100 million. Hedge funds held stakes worth $60 million in aggregate in Incontact Inc (NASDAQ:SAAS), which is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on.
