As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the third quarter. We get to see hedge funds’ thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Volt Information Sciences, Inc. (NYSE:VOLT).
Hedge fund interest in Volt Information Sciences, Inc. (NYSE:VOLT) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare VOLT to other stocks including Mastech Holdings, Inc. (NYSE:MHH), Champions Oncology, Inc. (NASDAQ:CSBR), and Emmis Communications Corporation (NASDAQ:EMMS) to get a better sense of its popularity.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Today there are plenty of formulas stock market investors employ to analyze stocks. Two of the most underrated formulas are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the elite investment managers can beat the S&P 500 by a significant amount (see the details here).
Matthew Hulsizer of PEAK6 Capital
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock already gained 20 percent. With all of this in mind we’re going to take a gander at the latest hedge fund action surrounding Volt Information Sciences, Inc. (NYSE:VOLT).
Hedge fund activity in Volt Information Sciences, Inc. (NYSE:VOLT)
Heading into the fourth quarter of 2019, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards VOLT over the last 17 quarters. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Constantinos J. Christofilis’s Archon Capital Management has the largest position in Volt Information Sciences, Inc. (NYSE:VOLT), worth close to $2.3 million, corresponding to 0.5% of its total 13F portfolio. The second most bullish fund manager is Matthew Hulsizer of PEAK6 Capital Management, with a $1.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other professional money managers that hold long positions include Renaissance Technologies, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and David P. Cohen’s Minerva Advisors. In terms of the portfolio weights assigned to each position Archon Capital Management allocated the biggest weight to Volt Information Sciences, Inc. (NYSE:VOLT), around 0.54% of its 13F portfolio. Minerva Advisors is also relatively very bullish on the stock, dishing out 0.04 percent of its 13F equity portfolio to VOLT.
Seeing as Volt Information Sciences, Inc. (NYSE:VOLT) has experienced bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there is a sect of fund managers who sold off their positions entirely heading into Q4. At the top of the heap, Bradley Louis Radoff’s Fondren Management dropped the largest stake of the “upper crust” of funds followed by Insider Monkey, totaling about $0.3 million in call options, and Matthew Hulsizer’s PEAK6 Capital Management was right behind this move, as the fund cut about $0.2 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Volt Information Sciences, Inc. (NYSE:VOLT) but similarly valued. We will take a look at Mastech Holdings, Inc. (NYSE:MHH), Champions Oncology, Inc. (NASDAQ:CSBR), Emmis Communications Corporation (NASDAQ:EMMS), and Equillium, Inc. (NASDAQ:EQ). This group of stocks’ market caps resemble VOLT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MHH | 1 | 306 | 0 |
| CSBR | 2 | 1065 | -1 |
| EMMS | 2 | 5323 | 0 |
| EQ | 3 | 4791 | -1 |
| Average | 2 | 2871 | -0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 2 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $5 million in VOLT’s case. Equillium, Inc. (NASDAQ:EQ) is the most popular stock in this table. On the other hand Mastech Holdings, Inc. (NYSE:MHH) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Volt Information Sciences, Inc. (NYSE:VOLT) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately VOLT wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on VOLT were disappointed as the stock returned -15.2% during the first two months of the fourth quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.