Is Safeguard Scientifics, Inc (NYSE:SFE) a good investment right now? We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, and have access to expert networks and industry insiders. They fail miserably sometimes but historically their consensus stock picks outperformed the market after adjusting for known risk factors.
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Safeguard Scientifics, Inc (NYSE:SFE) was in five hedge funds’ portfolios at the end of September. Safeguard Scientifics, Inc (NYSE:SFE) has experienced an increase in enthusiasm from smart money recently. There were four hedge funds in our database with Safeguard Scientifics, Inc (NYSE:SFE) holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Suffolk Bancorp (NASDAQ:SUBK), Xueda Education Group (ADR) (NYSE:XUE), and Arlington Asset Investment Corp (NYSE:AI) to gather more data points.
Follow Safeguard Scientifics Inc (NYSE:SFE)
Follow Safeguard Scientifics Inc (NYSE:SFE)
In the financial world there are a large number of metrics stock traders put to use to grade their holdings. Some of the most useful metrics are hedge fund and insider trading activity. our researchers have shown that, historically, those who follow the top picks of the elite investment managers can beat the market by a solid amount (see the details here).
With all of this in mind, we’re going to review the fresh action surrounding Safeguard Scientifics, Inc (NYSE:SFE).
How have hedgies been trading Safeguard Scientifics, Inc (NYSE:SFE)?
Heading into Q4, a total of five of the hedge funds tracked by Insider Monkey were bullish in this stock, an increase of 25% from the second quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
According to publicly available hedge fund holdings data compiled by Insider Monkey, Peter Keane’s Keane Capital Management has the number one position in Safeguard Scientifics, Inc (NYSE:SFE), worth close to $2.2 million, amounting to 2.9% of its total 13F portfolio. On Keane Capital Management’s heels is GRT Capital Partners, led by Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk, holding a $1.5 million position; 0.4% of its 13F portfolio is allocated to the stock. Other hedgies that are bullish consist of Jim Simons’ Renaissance Technologies, and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital. Springbok Capital initiated the largest position in Safeguard Scientifics, Inc (NYSE:SFE) during the quarter, having $0.1 million invested in the company at the end of the period.
Let’s now take a look at hedge fund activity in other stocks similar to Safeguard Scientifics, Inc (NYSE:SFE). We will take a look at Suffolk Bancorp (NASDAQ:SUBK), Xueda Education Group (ADR) (NYSE:XUE), Arlington Asset Investment Corp (NYSE:AI), and Wausau Paper Corp. (NYSE:WPP). This group of stocks’ market values are closest to Safeguard Scientifics, Inc (NYSE:SFE)’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SUBK | 10 | 59558 | 1 |
| XUE | 9 | 21375 | 3 |
| AI | 7 | 7147 | 0 |
| WPP | 17 | 116012 | 7 |
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 $51 million. That figure was a mere $4 millions in Safeguard Scientifics, Inc (NYSE:SFE)’s case. Wausau Paper Corp. (NYSE:WPP) is the most popular stock in this table. On the other hand, Arlington Asset Investment Corp (NYSE:AI) is the least popular one with only seven bullish hedge fund positions. Compared to these stocks Safeguard Scientifics, Inc (NYSE:SFE) is even less popular than Arlington Asset. Considering that hedge funds aren’t fond of this stock, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
