The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 817 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30th, 2020. In this article we are going to take a look at smart money sentiment towards Remark Holdings, Inc. (NASDAQ:MARK).
Is Remark Holdings, Inc. (NASDAQ:MARK) a worthy stock to buy now? Investors who are in the know were taking a pessimistic view. The number of bullish hedge fund bets shrunk by 2 in recent months. Remark Holdings, Inc. (NASDAQ:MARK) was in 3 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 5. Our calculations also showed that MARK isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). There were 5 hedge funds in our database with MARK holdings at the end of June.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Gavin Saitowitz of Springbok Capital
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website. Keeping this in mind let’s take a look at the recent hedge fund action surrounding Remark Holdings, Inc. (NASDAQ:MARK).
Hedge fund activity in Remark Holdings, Inc. (NASDAQ:MARK)
At the end of the third quarter, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -40% from the previous quarter. The graph below displays the number of hedge funds with bullish position in MARK over the last 21 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Millennium Management was the largest shareholder of Remark Holdings, Inc. (NASDAQ:MARK), with a stake worth $0.8 million reported as of the end of September. Trailing Millennium Management was OZ Management, which amassed a stake valued at $0.5 million. Citadel Investment Group was also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position OZ Management allocated the biggest weight to Remark Holdings, Inc. (NASDAQ:MARK), around 0.0031% of its 13F portfolio. Millennium Management is also relatively very bullish on the stock, dishing out 0.0009 percent of its 13F equity portfolio to MARK.
Judging by the fact that Remark Holdings, Inc. (NASDAQ:MARK) has faced a decline in interest from the aggregate hedge fund industry, it’s easy to see that there is a sect of hedge funds who were dropping their positions entirely in the third quarter. Intriguingly, Donald Sussman’s Paloma Partners said goodbye to the largest position of all the hedgies monitored by Insider Monkey, worth close to $0.6 million in stock, and Hal Mintz’s Sabby Capital was right behind this move, as the fund dumped about $0.1 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 2 funds in the third quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Remark Holdings, Inc. (NASDAQ:MARK) but similarly valued. We will take a look at Innovative Solutions & Support Inc (NASDAQ:ISSC), Permian Basin Royalty Trust (NYSE:PBT), Envela Corporation (NYSE:ELA), Erytech Pharma S.A. (NASDAQ:ERYP), CONSOL Energy Inc. (NYSE:CEIX), Civeo Corporation (NYSE:CVEO), and Esquire Financial Holdings, Inc. (NASDAQ:ESQ). All of these stocks’ market caps resemble MARK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ISSC | 5 | 5403 | 2 |
| PBT | 3 | 1010 | -1 |
| ELA | 1 | 1782 | -1 |
| ERYP | 2 | 4002 | 0 |
| CEIX | 10 | 10430 | -3 |
| CVEO | 12 | 42395 | -2 |
| ESQ | 4 | 12212 | -1 |
| Average | 5.3 | 11033 | -0.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.3 hedge funds with bullish positions and the average amount invested in these stocks was $11 million. That figure was $1 million in MARK’s case. Civeo Corporation (NYSE:CVEO) is the most popular stock in this table. On the other hand Envela Corporation (NYSE:ELA) is the least popular one with only 1 bullish hedge fund positions. Remark Holdings, Inc. (NASDAQ:MARK) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for MARK is 30.1. 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 28.1% in 2020 through November 23rd and still beat the market by 15.4 percentage points. A small number of hedge funds were also right about betting on MARK as the stock returned 11.1% since the end of the third quarter (through 11/23) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
