Daniel Benton‘s Andor Capital Management has filed its 13F with the SEC for the reporting period of March 31. The filing has given a lot of insight into the firm, revealing a public equity portfolio valued at $1.01 billion, which represents a $562.97 million decrease from three months prior. The fund engaged in a number of big moves during the quarter, including adding 14 new positions to its portfolio, among them Qorvo Inc (NASDAQ:QRVO), Avago Technologies Ltd (NASDAQ:AVGO), and Palo Alto Networks Inc (NYSE:PANW). The firm was co-founded in 2001 by Christopher James and Daniel Benton, the latter of whom is the current fund manager. The fund uses both short and long-term strategies in making its investments, mainly focusing on technology. Among the fund’s top tech stocks are positions in large-cap stocks like Facebook Inc (NASDAQ:FB), Twitter Inc (NYSE:TWTR) , and Apple Inc. (NASDAQ:AAPL). In this article, however, we are focusing on its top small-cap tech picks, which are Proofpoint Inc (NASDAQ:PFPT), Integrated Device Technology Inc (NASDAQ:IDTI), and Imperva Inc (NYSE:IMPV).
An everyday investor does not have the time or the required skill-set to carry out an in-depth analysis of equities and identify companies with the best future prospects like a fund with the knowledge and resources of Andor Capital can. However, it is also not a good idea to pay the egregiously high fees that investment firms charge for their stock picking expertise. Thus a retail investor is better off to monkey the most popular stock picks among hedge funds by him or herself. But not just any picks mind you. Our research has shown that a portfolio based on hedge funds’ top stock picks (which are invariably comprised entirely of large-cap companies) falls considerably short of a portfolio based on their best small-cap stock picks. The most popular large-cap stocks among hedge funds underperformed the market by an average of seven basis points per month in our back tests whereas the 15 most popular small-cap stock picks among hedge funds outperformed the market by nearly a percentage point per month over the same period between 1999 and 2012. Since officially launching our small-cap strategy in August 2012 it has performed just as predicted, beating the market by over 84 percentage points and returning over 144%, while hedge funds themselves have collectively underperformed the market (read the details here).
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As of the 13F reporting period of March 31, Andor Capital Management held 600,000 shares of Proofpoint Inc (NASDAQ:PFPT) worth $35.53 million. The company announced on June 4 that its Nexgate social media security segment and Hootsuite have experienced exponential growth over the last 12 months, registering a well over 300% rise in the number of their joint customers. Proofpoint Inc (NASDAQ:PFPT) also announced a partnership with Percolate, The System of Record for Marketing, towards providing social media regulatory coverage and diverse automated controls specialized for enterprise marketing companies. The partnership aims at creating an integrated solution that meets regulatory and brand compliance for marketing operations across different social media channels, including Facebook, Twitter, LinkedIn Corp (NYSE:LNKD), Instagram, and Tumblr. The company’s results for the quarter showed that it lost $0.41 in earnings per share, well below the Thomson Reuters estimate of a $0.25 loss. 23 hedge funds in our database were invested in the stock at the end of the first quarter, including Invicta Capital Management, Light Street Capital, and Ryan Frick and Oliver Evans‘ Dorsal Capital Management.
Andor reported ownership of 1.50 million shares of Integrated Device Technology Inc (NASDAQ:IDTI) valued at $30.03 million, which represented a significant drop from the 2.64 million shares of the stock it held at the end of 2014. Integrated Device Technology Inc (NASDAQ:IDTI) is a business that has huge growth potential, with Zacks having given it a “Strong Buy” recommendation. The stock realized a rare growth of 83.7% in earnings per share last year and is already showing good signs for this year too, standing at an estimated 36.1% improvement. At the same time, investors who are looking for long-term opportunities can also count on its growth prospects, having an estimated long-term growth rate of 17.5%. Within the past month alone, several analysts have commented on the stock and have on average raised their ratings on the stock by 6.9% so far. Its last quarterly results showed that it had earnings per share of $0.29, beating analysts’ consensus estimate of $0.26. Some of the other hedge funds that also have stakes in the stock besides Andor Capital Management are Brandon Osten’s Venator Capital Management, Mark Coe’s Coe Capital Management, and Josh Goldberg‘s G2 Investment Partners Management
At the end of the first quarter, Andor Capital Management had a total of 525,000 shares of Imperva Inc (NYSE:IMPV) with a market value of $22.42 million, which also represented a significant decline in the fund’s position in the stock compared to the previous reporting period, when it held 800,000 shares valued at $39.54 million. On May 28, the company hit a new 52-week high of $61.65. Analysts have given the stock a price target of $61.00, which represents an expected upside of 12.7%. RBC Capital Markets has an “Outperform” rating on the cyber security solutions provider. In earnings per share for the year, analysts expect Imperva Inc (NYSE:IMPV) to lose $1.58. Our data shows a total of 21 hedge funds invested in the stock at the end of the first quarter, including Hilltop Park Associates with ownership of 45,000 shares, and Ian Muhkerjee‘s Amiya Capital with 7,300 shares, a new position for the fund.
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