The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st. We at Insider Monkey have made an extensive database of more than 866 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded WISeKey International Holding AG (NASDAQ:WKEY) based on those filings.
Is WKEY a good stock to buy? WISeKey International Holding AG (NASDAQ:WKEY) investors should be aware of an increase in hedge fund sentiment in recent months. WISeKey International Holding AG (NASDAQ:WKEY) was in 3 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic was previously 2. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that WKEY isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. 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 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Ryan Tolkin, CIO of Schonfeld Strategic Advisors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $28 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Keeping this in mind let’s take a peek at the recent hedge fund action regarding WISeKey International Holding AG (NASDAQ:WKEY).
Do Hedge Funds Think WKEY Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 50% from one quarter earlier. On the other hand, there were a total of 0 hedge funds with a bullish position in WKEY a year ago. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
The largest stake in WISeKey International Holding AG (NASDAQ:WKEY) was held by Two Sigma Advisors, which reported holding $0.3 million worth of stock at the end of December. It was followed by Citadel Investment Group with a $0.2 million position. The only other hedge fund that is bullish on the company was Schonfeld Strategic Advisors.
Consequently, specific money managers have jumped into WISeKey International Holding AG (NASDAQ:WKEY) headfirst. Citadel Investment Group, managed by Ken Griffin, initiated the most valuable position in WISeKey International Holding AG (NASDAQ:WKEY). Citadel Investment Group had $0.2 million invested in the company at the end of the quarter. Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors also made a $0.2 million investment in the stock during the quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as WISeKey International Holding AG (NASDAQ:WKEY) but similarly valued. We will take a look at Everspin Technologies, Inc. (NASDAQ:MRAM), Ocean Bio-Chem, Inc. (NASDAQ:OBCI), Caladrius Biosciences Inc (NASDAQ:CLBS), Allied Esports Entertainment, Inc. (NASDAQ:AESE), Regulus Therapeutics Inc (NASDAQ:RGLS), Beyond Air, Inc. (NASDAQ:XAIR), and Evolution Petroleum Corporation (NYSE:EPM). All of these stocks’ market caps are closest to WKEY’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MRAM | 5 | 2030 | 0 |
| OBCI | 3 | 5377 | -1 |
| CLBS | 5 | 3949 | 2 |
| AESE | 2 | 414 | 0 |
| RGLS | 6 | 14908 | 2 |
| XAIR | 5 | 6015 | 1 |
| EPM | 9 | 10311 | -1 |
| Average | 5 | 6143 | 0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $6 million. That figure was $1 million in WKEY’s case. Evolution Petroleum Corporation (NYSE:EPM) is the most popular stock in this table. On the other hand Allied Esports Entertainment, Inc. (NASDAQ:AESE) is the least popular one with only 2 bullish hedge fund positions. WISeKey International Holding AG (NASDAQ:WKEY) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for WKEY is 43.1. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th and surpassed the market again by 3.3 percentage points. Unfortunately WKEY wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); WKEY investors were disappointed as the stock returned -41.4% since the end of March (through 6/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.