Should I Avoid Quotient Technology Inc (QUOT)?

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of June 30th. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Quotient Technology Inc (NYSE:QUOT).

Quotient Technology Inc (NYSE:QUOT) was in 24 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 25. QUOT investors should be aware of a decrease in support from the world’s most elite money managers recently. There were 25 hedge funds in our database with QUOT holdings at the end of March. Our calculations also showed that QUOT isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Bill Miller of Miller Value Partners

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV 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 we’re going to analyze the key hedge fund action encompassing Quotient Technology Inc (NYSE:QUOT).

Do Hedge Funds Think QUOT Is A Good Stock To Buy Now?

At second quarter’s end, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of -4% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards QUOT over the last 24 quarters. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).

The largest stake in Quotient Technology Inc (NYSE:QUOT) was held by Lynrock Lake, which reported holding $171.2 million worth of stock at the end of June. It was followed by Trigran Investments with a $83.5 million position. Other investors bullish on the company included Miller Value Partners, Ophir Asset Management, and Samjo Capital. In terms of the portfolio weights assigned to each position Samjo Capital allocated the biggest weight to Quotient Technology Inc (NYSE:QUOT), around 18.62% of its 13F portfolio. Lynrock Lake is also relatively very bullish on the stock, designating 11.78 percent of its 13F equity portfolio to QUOT.

Since Quotient Technology Inc (NYSE:QUOT) has witnessed falling interest from hedge fund managers, it’s easy to see that there exists a select few money managers that elected to cut their full holdings in the second quarter. Intriguingly, Warren Lammert’s Granite Point Capital dropped the largest investment of all the hedgies tracked by Insider Monkey, valued at close to $8.2 million in stock. George McCabe’s fund, Portolan Capital Management, also dropped its stock, about $6.2 million worth. These moves are important to note, as total hedge fund interest dropped by 1 funds in the second quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Quotient Technology Inc (NYSE:QUOT) but similarly valued. These stocks are First Foundation Inc (NASDAQ:FFWM), Celestica Inc. (NYSE:CLS), Apartment Investment and Management Co. (NYSE:AIV), Diebold Nixdorf Incorporated (NYSE:DBD), Score Media and Gaming Inc. (NASDAQ:SCR), Bioventus Inc. (NASDAQ:BVS), and ADTRAN, Inc. (NASDAQ:ADTN). This group of stocks’ market values resemble QUOT’s market value.

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As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $100 million. That figure was $466 million in QUOT’s case. First Foundation Inc (NASDAQ:FFWM) is the most popular stock in this table. On the other hand Score Media and Gaming Inc. (NASDAQ:SCR) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Quotient Technology Inc (NYSE:QUOT) is more popular among hedge funds. Our overall hedge fund sentiment score for QUOT is 82.8. 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. 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. Unfortunately QUOT wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on QUOT were disappointed as the stock returned -39.1% since the end of the second quarter (through 10/22) 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 since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.