Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
PFSweb, Inc. (NASDAQ:PFSW) investors should pay attention to a decrease in enthusiasm from smart money in recent months. There were 10 hedge funds in our database with PFSW positions at the end of September. 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 Jamba, Inc. (NASDAQ:JMBA), Maxwell Technologies Inc. (NASDAQ:MXWL), and Premier Financial Bancorp, Inc. (NASDAQ:PFBI) to gather more data points.
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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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With all of this in mind, we’re going to take a look at the new action encompassing PFSweb, Inc. (NASDAQ:PFSW).
Hedge fund activity in PFSweb, Inc. (NASDAQ:PFSW)
At Q3’s end, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of -17% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in PFSW over the last 5 quarters. So, let’s find out 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, Jim Simons’ Renaissance Technologies, one of the largest hedge funds in the world, holds the most valuable position in PFSweb, Inc. (NASDAQ:PFSW). Renaissance Technologies has a $6 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second most bullish fund manager is Arnaud Ajdler of Engine Capital, with a $4.4 million position; the fund has 4% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors with similar optimism consist of John Overdeck and David Siegel’s Two Sigma Advisors, Israel Englander’s Millennium Management and Ken Griffin’s Citadel Investment Group. We should note that Engine Capital is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Since PFSweb, Inc. (NASDAQ:PFSW) has sustained bearish sentiment from the smart money, we can see that there is a sect of money managers that slashed their full holdings in the third quarter. Interestingly, Peter Algert and Kevin Coldiron’s Algert Coldiron Investors dropped the largest stake of the 700 funds followed by Insider Monkey, worth about $0.3 million in stock, and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital was right behind this move, as the fund cut about $0 million worth of shares.
Let’s now take a look at hedge fund activity in other stocks similar to PFSweb, Inc. (NASDAQ:PFSW). These stocks are Jamba, Inc. (NASDAQ:JMBA), Maxwell Technologies Inc. (NASDAQ:MXWL), Premier Financial Bancorp, Inc. (NASDAQ:PFBI), and Advanced Emissions Solutions, Inc. (NASDAQ:ADES). This group of stocks’ market valuations are closest to PFSW’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| JMBA | 7 | 56461 | -1 |
| MXWL | 4 | 7462 | -2 |
| PFBI | 4 | 4963 | 0 |
| ADES | 7 | 44924 | 7 |
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 $28 million. That figure was $14 million in PFSW’s case. Jamba, Inc. (NASDAQ:JMBA) is the most popular stock in this table. On the other hand Maxwell Technologies Inc. (NASDAQ:MXWL) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks PFSweb, Inc. (NASDAQ:PFSW) 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.
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