Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
MeetMe Inc (NYSEAMEX:MEET) was in 17 hedge funds’ portfolios at the end of September. MEET investors should pay attention to an increase in hedge fund sentiment recently. There were 14 hedge funds in our database with MEET positions at the end of the previous quarter. At the end of this article we will also compare MEET to other stocks including BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX), Tangoe Inc (NASDAQ:TNGO), and Permian Basin Royalty Trust (NYSE:PBT) to get a better sense of its popularity.
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We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.
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What does the smart money think about MeetMe Inc (NYSEAMEX:MEET)?
At the end of the third quarter, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 21% rise from one quarter earlier. Hedge fund ownership of the stock has now more than doubled over the past 2 quarters. Below, you can check out the change in hedge fund sentiment towards MEET over the last 5 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holds the most valuable position in MeetMe Inc (NYSEAMEX:MEET). Arrowstreet Capital has a $17.6 million position in the stock. The second largest stake is held by Harvest Capital Strategies, led by Joseph A. Jolson, which holds a $17.5 million position; the fund has 2.5% of its 13F portfolio invested in the stock. Some other members of the smart money that are bullish encompass Cliff Asness’ AQR Capital Management, Warren Lammert’s Granite Point Capital, and Brian C. Freckmann’s Lyon Street 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-microcap stocks.
As one would reasonably expect, key hedge funds were breaking ground themselves. Granite Point Capital, led by Warren Lammert, established the largest position in MeetMe Inc (NYSEAMEX:MEET). Granite Point Capital had $1.8 million invested in the company at the end of the quarter. Brian C. Freckmann’s Lyon Street Capital also made a $1.8 million investment in the stock during the quarter. The other funds with brand new MEET positions are John Overdeck and David Siegel’s Two Sigma Advisors, Chuck Royce’s Royce & Associates, and Ken Griffin’s Citadel Investment Group.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as MeetMe Inc (NYSEAMEX:MEET) but similarly valued. These stocks are BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX), Tangoe Inc (NASDAQ:TNGO), Permian Basin Royalty Trust (NYSE:PBT), and Syros Pharmaceuticals Inc (NASDAQ:SYRS). This group of stocks’ market caps resemble MEET’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BCRX | 16 | 122719 | 1 |
| TNGO | 12 | 25577 | 1 |
| PBT | 10 | 16034 | 2 |
| SYRS | 7 | 49907 | 1 |
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $54 million. That figure was also $54 million in MEET’s case. BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) is the most popular stock in this table. On the other hand Syros Pharmaceuticals Inc (NASDAQ:SYRS) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks MeetMe Inc (NYSEAMEX:MEET) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers and growing fonder by the quarter, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None
