Amid an overall market correction, many stocks that smart money investors were collectively bullish on tanked during the third quarter. Among them, Valeant and Micron ranked among the top 30 picks of elite investors and both lost around 20%. Citigroup, which was the third-most popular stock, lost 10% amid uncertainty regarding the future of interest rates. Nevertheless, our research shows that most of the stocks that smart money collectively likes historically generated strong risk-adjusted returns. This is why following the smart money sentiment is a useful tool to identify the next stock to invest in.
Shutterstock Inc (NYSE:SSTK) investors should be aware of an increase in activity from the world’s largest hedge funds in recent months. Shutterstock Inc was in 13 hedge funds’ portfolios at the end of the third quarter of 2015. There were 12 hedge funds in our database with Shutterstock holdings at the end of the previous quarter. At the end of this article we will also compare Shutterstock Inc to other stocks including CNOOC Limited (ADR) (NYSE:CEO), The Ensign Group, Inc. (NASDAQ:ENSG), and Precision Drilling Corp (USA) (NYSE:PDS) to get a better sense of its popularity.
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At the moment there are several tools market participants employ to size up their holdings. A duo of the less utilized tools are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the top picks of the elite investment managers can outperform the market by a significant amount (see the details here).
Keeping this in mind, let’s take a gander at the key action regarding Shutterstock Inc (NYSE:SSTK).
Hedge fund activity in Shutterstock Inc (NYSE:SSTK)
Heading into Q4, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, an 8% uptick from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their stakes substantially (or had already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Millennium Management, managed by Israel Englander, holds the number one position in Shutterstock Inc (NYSE:SSTK). Millennium Management has a $6.9 million position in the stock, comprising less than 0.1% of its 13F portfolio. The second-largest stake is held by TCS Capital Management, led by Eric Semler, holding a $2.9 million position; the fund has 2.4% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that hold long positions include Glenn Russell Dubin’s Highbridge Capital Management, and Matthew Hulsizer’s PEAK6 Capital Management.
Consequently, key hedge funds have jumped into Shutterstock Inc (NYSE:SSTK) headfirst. TCS Capital Management assembled the biggest position in Shutterstock Inc (NYSE:SSTK). TCS Capital Management had $2.9 million invested in the company at the end of the quarter. Highbridge Capital Management also initiated a $2.4 million position during the quarter. The other funds with new positions in the stock are Ahmet Okumus’ Okumus Fund Management, and George Hall’s Clinton Group.
Let’s now review hedge fund activity in other stocks similar to Shutterstock Inc (NYSE:SSTK). We will take a look at CNOOC Limited (ADR) (NYSE:CEO), The Ensign Group, Inc. (NASDAQ:ENSG), Precision Drilling Corp (USA) (NYSE:PDS), and Nuveen Credit Strategies Income Fund (NYSE:JQC). This group of stocks’ market valuations are closest to Shutterstock Inc’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CEO | 12 | 391511 | 0 |
| ENSG | 9 | 43017 | -5 |
| PDS | 8 | 39831 | 0 |
| JQC | 5 | 15116 | 1 |
As you can see these stocks had an average of 8.5 hedge funds with bullish positions and the average amount invested in these stocks was $122 million. That figure was $21 million in Shutterstock Inc’s case. CNOOC Limited (ADR) (NYSE:CEO) is the most popular stock in this table. On the other hand Nuveen Credit Strategies Income Fund (NYSE:JQC) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Shutterstock Inc (NYSE:SSTK) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
