Where Do Hedge Funds Stand On Resonant Inc. (RESN)?

We at Insider Monkey have gone over 866 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article, we look at what those funds think of Resonant Inc. (NASDAQ:RESN) based on that data.

Is Resonant Inc. (NASDAQ:RESN) a buy right now? Money managers were in an optimistic mood. The number of bullish hedge fund positions moved up by 2 in recent months. Resonant Inc. (NASDAQ:RESN) was in 6 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 5. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that RESN isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.

Bruce Kovner of Caxton Associates LP

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $24 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery 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. Now let’s analyze the recent hedge fund action surrounding Resonant Inc. (NASDAQ:RESN).

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

At Q1’s end, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 50% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards RESN over the last 23 quarters. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).

Among these funds, Renaissance Technologies held the most valuable stake in Resonant Inc. (NASDAQ:RESN), which was worth $2.3 million at the end of the fourth quarter. On the second spot was Millennium Management which amassed $1.9 million worth of shares. Citadel Investment Group, PDT Partners, and Two Sigma Advisors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position PDT Partners allocated the biggest weight to Resonant Inc. (NASDAQ:RESN), around 0.02% of its 13F portfolio. Caxton Associates LP is also relatively very bullish on the stock, dishing out 0.0041 percent of its 13F equity portfolio to RESN.

With a general bullishness amongst the heavyweights, key money managers were leading the bulls’ herd. PDT Partners, managed by Peter Muller, initiated the biggest position in Resonant Inc. (NASDAQ:RESN). PDT Partners had $0.3 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also initiated a $0.2 million position during the quarter. The only other fund with a brand new RESN position is Bruce Kovner’s Caxton Associates LP.

Let’s now take a look at hedge fund activity in other stocks similar to Resonant Inc. (NASDAQ:RESN). These stocks are ACNB Corporation (NASDAQ:ACNB), NuCana plc (NASDAQ:NCNA), Atossa Therapeutics, Inc. (NASDAQ:ATOS), Clever Leaves Holdings Inc. (NASDAQ:CLVR), Taiwan Liposome Company, Ltd. (NASDAQ:TLC), Target Hospitality Corp. (NASDAQ:TH), and 9 Meters Biopharma, Inc. (NASDAQ:NMTR). This group of stocks’ market values are closest to RESN’s market value.

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As you can see these stocks had an average of 6.6 hedge funds with bullish positions and the average amount invested in these stocks was $19 million. That figure was $6 million in RESN’s case. 9 Meters Biopharma, Inc. (NASDAQ:NMTR) is the most popular stock in this table. On the other hand ACNB Corporation (NASDAQ:ACNB) is the least popular one with only 1 bullish hedge fund positions. Resonant Inc. (NASDAQ:RESN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for RESN is 54.9. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 19.3% in 2021 through June 25th and surpassed the market again by 4.8 percentage points. Unfortunately RESN wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); RESN investors were disappointed as the stock returned -19.3% since the end of March (through 6/25) 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 in 2021.

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