Where Does The Smart Money Stand On Vonage Holdings Corp. (VG)?

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 have processed the filings of the more than 867 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30th holdings, data that is available nowhere else. Should you consider Vonage Holdings Corp. (NASDAQ:VG) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.

Vonage Holdings Corp. (NASDAQ:VG) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 29 hedge funds’ portfolios at the end of the third quarter of 2021. Our calculations also showed that VG isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). 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 BRF SA (NYSE:BRFS), Nevro Corp (NYSE:NVRO), and Inari Medical, Inc. (NASDAQ:NARI) to gather more data points.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. With all of this in mind we’re going to take a glance at the recent hedge fund action encompassing Vonage Holdings Corp. (NASDAQ:VG).

Barry Rosenstein of JANA Partners

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

At the end of the third quarter, a total of 29 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards VG over the last 25 quarters. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Peter S. Park’s Park West Asset Management has the largest position in Vonage Holdings Corp. (NASDAQ:VG), worth close to $202.9 million, corresponding to 4.9% of its total 13F portfolio. On Park West Asset Management’s heels is Barry Rosenstein of JANA Partners, with a $162.3 million position; the fund has 13% of its 13F portfolio invested in the stock. Remaining peers with similar optimism encompass Ted White and Christopher Kiper’s Legion Partners Asset Management, Michael A. Price and Amos Meron’s Empyrean Capital Partners and Claus Moller’s P2 Capital Partners. In terms of the portfolio weights assigned to each position Legion Partners Asset Management allocated the biggest weight to Vonage Holdings Corp. (NASDAQ:VG), around 18.44% of its 13F portfolio. JANA Partners is also relatively very bullish on the stock, dishing out 12.99 percent of its 13F equity portfolio to VG.

Because Vonage Holdings Corp. (NASDAQ:VG) has witnessed bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of hedge funds who sold off their positions entirely in the third quarter. At the top of the heap, Ken Griffin’s Citadel Investment Group dropped the biggest stake of the “upper crust” of funds followed by Insider Monkey, valued at close to $31.5 million in stock, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital was right behind this move, as the fund said goodbye to about $31 million worth. These moves are intriguing to say the least, as total 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 Vonage Holdings Corp. (NASDAQ:VG) but similarly valued. We will take a look at BRF SA (NYSE:BRFS), Nevro Corp (NYSE:NVRO), Inari Medical, Inc. (NASDAQ:NARI), Apollo Medical Holdings, Inc. (NASDAQ:AMEH), Cohen & Steers, Inc. (NYSE:CNS), Merit Medical Systems, Inc. (NASDAQ:MMSI), and Schneider National, Inc. (NYSE:SNDR). This group of stocks’ market valuations are similar to VG’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.1 hedge funds with bullish positions and the average amount invested in these stocks was $212 million. That figure was $843 million in VG’s case. Nevro Corp (NYSE:NVRO) is the most popular stock in this table. On the other hand BRF SA (NYSE:BRFS) is the least popular one with only 6 bullish hedge fund positions. Vonage Holdings Corp. (VG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VG is 77.3. 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 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Hedge funds were also right about betting on VG as the stock returned 27.9% since the end of Q3 (through 11/30) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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