The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge funds have been producing disappointing net returns in recent years, however that was partly due to the poor performance of small-cap stocks in general. Well, small-cap stocks finally turned the corner and have been beating the large-cap stocks by more than 10 percentage points over the last 5 months.This means the relevancy of hedge funds’ public filings became inarguable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards the Internet services company Tucows Inc. (USA) (NASDAQ:TCX).
Hedge fund interest in Tucows Inc. (USA) (NASDAQ:TCX) shares was flat during the third quarter. This is usually a negative indicator. 6 hedge funds that we track owned the stock on September 30, same as on June 30. At the end of this article we will also compare TCX to other stocks including Western Ast Clymr Infl Lkd Sc & Incm Fd (NYSE:WIA), Hometrust Bancshares Inc (NASDAQ:HTBI), and Baozun Inc (ADR) (NASDAQ:BZUN) to get a better sense of its popularity.
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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What does the smart money think about Tucows Inc. (USA) (NASDAQ:TCX)?
Heading into the fourth quarter of 2016, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, unchanged from one quarter earlier. By comparison, 8 hedge funds held shares or bullish call options in TCX heading into this year, so hedge fund ownership has dipped by 25% in 2016. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, one of the largest hedge funds in the world, has the number one position in Tucows Inc. (USA) (NASDAQ:TCX), worth close to $23.6 million. The second most bullish fund manager is John H. Lewis of Osmium Partners, which holds a $14.9 million position; 12.3% of its 13F portfolio is allocated to the stock. Some other peers with similar optimism include John Overdeck and David Siegel’s Two Sigma Advisors and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds, which is based on the performance of their 13F long positions in non-micro-cap stocks.
We already know that not all hedge funds are bullish on the stock and some hedge funds actually sold off their positions entirely. Intriguingly, Israel Englander’s Millennium Management sold off the largest investment of all the hedgies studied by Insider Monkey, comprising an estimated $0.3 million in stock, and Glenn Russell Dubin’s Highbridge Capital Management was right behind this move, as the fund said goodbye to about $0.3 million worth of shares.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Tucows Inc. (USA) (NASDAQ:TCX) but similarly valued. We will take a look at Western Ast Clymr Infl Lkd Sc & Incm Fd (NYSE:WIA), Hometrust Bancshares Inc (NASDAQ:HTBI), Baozun Inc (ADR) (NASDAQ:BZUN), and Energous Corp (NASDAQ:WATT). This group of stocks’ market values match TCX’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WIA | 4 | 1716 | 4 |
| HTBI | 9 | 25187 | -2 |
| BZUN | 9 | 22381 | 3 |
| WATT | 5 | 36916 | 3 |
As you can see these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $22 million. That figure was $47 million in TCX’s case. Hometrust Bancshares Inc (NASDAQ:HTBI) is the most popular stock in this table. On the other hand Western Ast Clymr Infl Lkd Sc & Incm Fd (NYSE:WIA) is the least popular one with only 4 bullish hedge fund positions. Tucows Inc. (USA) (NASDAQ:TCX) 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. In this regard HTBI might be a better candidate to consider taking a long position in.
Disclosure: None
