It was a rough fourth quarter for many hedge funds, which were naturally unable to overcome the big dip in the broad market, as the S&P 500 fell by about 4.8% during 2018 and average hedge fund losing about 1%. The Russell 2000, composed of smaller companies, performed even worse, trailing the S&P by more than 6 percentage points, as investors fled less-known quantities for safe havens. This was the case with hedge funds, who we heard were pulling money from the market amid the volatility, which included money from small-cap stocks, which they invest in at a higher rate than other investors. This action contributed to the greater decline in these stocks during the tumultuous period. We will study how this market volatility affected their sentiment towards TiVo Corporation (NASDAQ:TIVO) during the quarter below.
Is TiVo Corporation (NASDAQ:TIVO) a buy here? Prominent investors are betting on the stock. The number of bullish hedge fund positions advanced by 1 in recent months. Our calculations also showed that tivo isn’t among the 30 most popular stocks among hedge funds. TIVO was in 19 hedge funds’ portfolios at the end of the fourth quarter of 2018. There were 18 hedge funds in our database with TIVO holdings at the end of the previous quarter.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (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 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to check out the key hedge fund action regarding TiVo Corporation (NASDAQ:TIVO).
How have hedgies been trading TiVo Corporation (NASDAQ:TIVO)?
Heading into the first quarter of 2019, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 6% from the second quarter of 2018. Below, you can check out the change in hedge fund sentiment towards TIVO over the last 14 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.
According to Insider Monkey’s hedge fund database, Engaged Capital, managed by Glenn W. Welling, holds the number one position in TiVo Corporation (NASDAQ:TIVO). Engaged Capital has a $23.8 million position in the stock, comprising 4.4% of its 13F portfolio. The second largest stake is held by Soros Fund Management, led by George Soros, holding a $14.8 million position; 0.4% of its 13F portfolio is allocated to the company. Some other peers with similar optimism include Cynthia Paul’s Lynrock Lake, Ken Griffin’s Citadel Investment Group and D. E. Shaw’s D E Shaw.
Consequently, specific money managers have jumped into TiVo Corporation (NASDAQ:TIVO) headfirst. Lynrock Lake, managed by Cynthia Paul, established the biggest position in TiVo Corporation (NASDAQ:TIVO). Lynrock Lake had $12.4 million invested in the company at the end of the quarter. Marc Majzner’s Clearline Capital also made a $1.1 million investment in the stock during the quarter. The other funds with brand new TIVO positions are Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital, Paul Tudor Jones’s Tudor Investment Corp, and Dmitry Balyasny’s Balyasny Asset Management.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as TiVo Corporation (NASDAQ:TIVO) but similarly valued. We will take a look at 3D Systems Corporation (NYSE:DDD), Big Lots, Inc. (NYSE:BIG), CorVel Corporation (NASDAQ:CRVL), and Huron Consulting Group Inc. (NASDAQ:HURN). This group of stocks’ market values are similar to TIVO’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DDD | 11 | 50546 | -3 |
| BIG | 19 | 137809 | 0 |
| CRVL | 15 | 112790 | 4 |
| HURN | 13 | 28589 | 2 |
| Average | 14.5 | 82434 | 0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.5 hedge funds with bullish positions and the average amount invested in these stocks was $82 million. That figure was $91 million in TIVO’s case. Big Lots, Inc. (NYSE:BIG) is the most popular stock in this table. On the other hand 3D Systems Corporation (NYSE:DDD) is the least popular one with only 11 bullish hedge fund positions. TiVo Corporation (NASDAQ:TIVO) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately TIVO wasn’t nearly as popular as these 15 stock and hedge funds that were betting on TIVO were disappointed as the stock returned -2.1% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
