The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 817 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, about a month before the elections. In this article we look at what those investors think of Turtle Beach Corp (NASDAQ:HEAR).
Turtle Beach Corp (NASDAQ:HEAR) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 13 hedge funds’ portfolios at the end of the third quarter of 2020. Our calculations also showed that HEAR isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). At the end of this article we will also compare HEAR to other stocks including Citi Trends, Inc. (NASDAQ:CTRN), Agile Therapeutics Inc (NASDAQ:AGRX), and NuCana plc (NASDAQ:NCNA) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Roger Ibbotson of Zebra Capital Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. Now we’re going to analyze the new hedge fund action regarding Turtle Beach Corp (NASDAQ:HEAR).
Do Hedge Funds Think HEAR Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. By comparison, 10 hedge funds held shares or bullish call options in HEAR a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Dennis Goldstein’s Rip Road Capital has the most valuable position in Turtle Beach Corp (NASDAQ:HEAR), worth close to $12.9 million, amounting to 4.4% of its total 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, holding a $8.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish encompass D. E. Shaw’s D E Shaw, John Overdeck and David Siegel’s Two Sigma Advisors and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Rip Road Capital allocated the biggest weight to Turtle Beach Corp (NASDAQ:HEAR), around 4.37% of its 13F portfolio. Zebra Capital Management is also relatively very bullish on the stock, dishing out 0.53 percent of its 13F equity portfolio to HEAR.
Seeing as Turtle Beach Corp (NASDAQ:HEAR) has experienced declining sentiment from hedge fund managers, logic holds that there exists a select few fund managers who were dropping their positions entirely heading into Q4. At the top of the heap, Mark Broach’s Manatuck Hill Partners dropped the biggest position of all the hedgies monitored by Insider Monkey, totaling an estimated $1.9 million in stock. Greg Eisner’s fund, Engineers Gate Manager, also sold off its stock, about $0.9 million worth. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Turtle Beach Corp (NASDAQ:HEAR) but similarly valued. These stocks are Citi Trends, Inc. (NASDAQ:CTRN), Agile Therapeutics Inc (NASDAQ:AGRX), NuCana plc (NASDAQ:NCNA), ORBCOMM Inc (NASDAQ:ORBC), Metacrine, Inc. (NASDAQ:MTCR), Arbutus Biopharma Corp (NASDAQ:ABUS), and Liminal BioSciences Inc. (NASDAQ:LMNL). This group of stocks’ market valuations are closest to HEAR’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CTRN | 17 | 45754 | 4 |
| AGRX | 9 | 53501 | -1 |
| NCNA | 8 | 23107 | 4 |
| ORBC | 13 | 49298 | -6 |
| MTCR | 8 | 25031 | 8 |
| ABUS | 9 | 9749 | 1 |
| LMNL | 1 | 34325 | -1 |
| Average | 9.3 | 34395 | 1.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.3 hedge funds with bullish positions and the average amount invested in these stocks was $34 million. That figure was $39 million in HEAR’s case. Citi Trends, Inc. (NASDAQ:CTRN) is the most popular stock in this table. On the other hand Liminal BioSciences Inc. (NASDAQ:LMNL) is the least popular one with only 1 bullish hedge fund positions. Turtle Beach Corp (NASDAQ:HEAR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HEAR is 72.5. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. Hedge funds were also right about betting on HEAR, though not to the same extent, as the stock returned 10.8% since Q3 (through December 8th) and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.
