Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips on the charts, usually don’t make them change their opinion towards a company. This time it may be different. During the third quarter we observed increased volatility and small-cap stocks underperformed the market. Hedge fund investor letters indicated that they are cutting their overall exposure, closing out some position and doubling down on others. Let’s take a look at the hedge fund sentiment towards Tucows Inc. (USA) (NASDAQ:TCX) to find out whether it was one of their high conviction long-term ideas.
Tucows Inc. (USA) (NASDAQ:TCX) was in 11 hedge funds’ portfolios at the end of September. Tucows Inc. (USA) (NASDAQ:TCX) investors should pay attention to an increase in support from the world’s most elite money managers of late. There were 9 hedge funds in our database with Tucows Inc. (USA) (NASDAQ:TCX) positions 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 Westmoreland Coal Company (NASDAQ:WLB), Territorial Bancorp Inc (NASDAQ:TBNK), and Armada Hoffler Properties Inc (NYSE:AHH) to gather more data points.
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Today, there are a lot of tools stock market investors employ to value their holdings. A pair of the most under-the-radar tools are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the top picks of the elite investment managers can outclass the market by a significant amount (see the details here).
Now, we’re going to take a look at the latest action regarding Tucows Inc. (USA) (NASDAQ:TCX).
What have hedge funds been doing with Tucows Inc. (USA) (NASDAQ:TCX)?
At the end of September, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 22% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Renaissance Technologies has the largest position in Tucows Inc. (USA) (NASDAQ:TCX), worth close to $18.7 million, amounting to less than 0.1% of its total 13F portfolio. The second largest stake is held by Osmium Partners, managed by John H Lewis, which holds a $12.8 million position; the fund has 14.7% of its 13F portfolio invested in the stock. Some other members of the smart money with similar optimism include Richard Driehaus’ Driehaus Capital, and Glenn Russell Dubin’s Highbridge Capital Management.
As industrywide interest jumped, key money managers were breaking ground themselves. Hutchin Hill Capital, managed by Neil Chriss, established the most outsized position in Tucows Inc. (USA) (NYSEAMEX:TCX). Hutchin Hill Capital had $0.7 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated an $0.5 million position during the quarter. The other funds with brand new TCX positions are Matthew Hulsizer’s PEAK6 Capital Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Ken Griffin’s Citadel Investment Group.
Let’s also examine hedge fund activity in other stocks similar to Tucows Inc. (USA) (NASDAQ:TCX). These stocks are Westmoreland Coal Company (NASDAQ:WLB), Territorial Bancorp Inc (NASDAQ:TBNK), Armada Hoffler Properties Inc (NYSE:AHH), and CIBER, Inc. (NYSE:CBR). This group of stocks’ market values is similar to Tucows Inc. (USA) (NASDAQ:TCX)’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WLB | 19 | 95715 | -2 |
| TBNK | 8 | 21595 | 1 |
| AHH | 12 | 24000 | 1 |
| CBR | 10 | 23908 | -1 |
As you can see, these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $41 million. That figure was $41 million in Tucows Inc. (USA) (NASDAQ:TCX)’s case. Westmoreland Coal Company (NASDAQ:WLB) is the most popular stock in this table. On the other hand, Territorial Bancorp Inc (NASDAQ:TBNK) is the least popular one with only 8 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, Westmoreland Coal Company (NASDAQ:WLB) might be a better candidate to consider a long position.
