The market has been volatile as the Federal Reserve winds down its easy money policies. Small cap stocks have been hit hard as a result, as the Russell 2000 ETF (IWM) has underperformed the larger S&P 500 ETF (SPY) by more than 14 percentage points between June 25th and the end of October. SEC filings and hedge fund investor letters indicate that the smart money seems to be paring back their overall long exposure, and the funds’ movements are one of the reasons why the major indexes have retraced. In this article, we analyze what the smart money thinks of Telenav Inc (NASDAQ:TNAV) and find out how it is affected by hedge funds’ moves.
Telenav Inc (NASDAQ:TNAV) investors should be aware of a decrease in support from the world’s most elite money managers in recent months. TNAV was in 16 hedge funds’ portfolios at the end of September. There were 20 hedge funds in our database with TNAV holdings 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 PDF Solutions, Inc. (NASDAQ:PDFS), Immersion Corporation (NASDAQ:IMMR), and Sandstorm Gold Ltd. (NYSEMKT:SAND) to gather more data points.
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If you’d ask most market participants, hedge funds are perceived as slow, outdated investment vehicles of the past. While there are over 8000 funds trading at the moment, Our experts choose to focus on the bigwigs of this club, around 700 funds. It is estimated that this group of investors direct most of all hedge funds’ total capital, and by keeping track of their inimitable equity investments, Insider Monkey has formulated several investment strategies that have historically defeated the broader indices. Insider Monkey’s small-cap hedge fund strategy outperformed the S&P 500 index by 12 percentage points annually for a decade in their back tests.
With all of this in mind, let’s take a look at the recent action surrounding Telenav Inc (NASDAQ:TNAV).
What does the smart money think about Telenav Inc (NASDAQ:TNAV)?
Heading into Q4, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a fall of 20% from the second quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Brett Hendrickson’s Nokomis Capital has the biggest position in Telenav Inc (NASDAQ:TNAV), worth close to $28.7 million, comprising 8.2% of its total 13F portfolio. Sitting at the No. 2 spot is Lyon Street Capital, led by Brian C. Freckmann, holding a $4.3 million position; 3.1% of its 13F portfolio is allocated to the stock. Remaining professional money managers with similar optimism include Jeffrey Moskowitz’s Harvey Partners, Peter Keane’s Keane Capital Management and Warren Lammert’s Granite Point Capital.
Due to the fact that Telenav Inc (NASDAQ:TNAV) has faced falling interest from hedge fund managers, we can see that there were a few hedge funds that elected to cut their positions entirely in the third quarter. It’s worth mentioning that Chuck Royce’s Royce & Associates dropped the biggest investment of the 700 funds tracked by Insider Monkey, valued at an estimated $3.3 million in stock, and Richard Driehaus’ Driehaus Capital was right behind this move, as the fund cut about $2.5 million worth of TNAV shares. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 4 funds in the third quarter.
Let’s also examine hedge fund activity in other stocks similar to Telenav Inc (NASDAQ:TNAV). We will take a look at PDF Solutions, Inc. (NASDAQ:PDFS), Immersion Corporation (NASDAQ:IMMR), Sandstorm Gold Ltd. (NYSEMKT:SAND), and Landec Corporation (NASDAQ:LNDC). All of these stocks’ market caps are closest to TNAV’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PDFS | 19 | 56317 | 5 |
| IMMR | 21 | 131935 | -1 |
| SAND | 8 | 23749 | 1 |
| LNDC | 13 | 65926 | 5 |
As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $69 million. TNAV was not far behind with $66 million worth of investments. Immersion Corporation (NASDAQ:IMMR) is the most popular stock in this table. On the other hand Sandstorm Gold Ltd. (NYSEMKT:SAND) is the least popular one with only 8 bullish hedge fund positions. Telenav Inc (NASDAQ:TNAV) is not the most popular stock in this group, but hedge fund interest is still above average. Although this is a slightly positive signal, we’d rather spend our time researching stocks that hedge funds are piling on. In this regard IMMR might be a better candidate to consider a long position.
