Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 750 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Fiverr International Ltd. (NYSE:FVRR).
Is Fiverr International Ltd. (NYSE:FVRR) an excellent investment right now? Money managers are taking a pessimistic view. The number of bullish hedge fund bets retreated by 4 in recent months. Our calculations also showed that FVRR isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). FVRR was in 5 hedge funds' portfolios at the end of the third quarter of 2019. There were 9 hedge funds in our database with FVRR holdings at the end of the previous quarter.
Video: Click the image to 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 flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 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.
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Paul Tudor Jones of Tudor Investment Corp[/caption]
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 encompassing Fiverr International Ltd. (NYSE:FVRR).
What does smart money think about Fiverr International Ltd. (NYSE:FVRR)?
Heading into the fourth quarter of 2019, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of -44% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards FVRR over the last 17 quarters. With hedge funds' capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Jack Ripsteen's Potrero Capital Research has the number one position in Fiverr International Ltd. (NYSE:FVRR), worth close to $6.3 million, amounting to 3.6% of its total 13F portfolio. Sitting at the No. 2 spot is Ken Griffin of Citadel Investment Group, with a $1.5 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors with similar optimism encompass Paul Tudor Jones's Tudor Investment Corp, Chet Kapoor's Tenzing Global Investors and Claes Fornell's CSat Investment Advisory. In terms of the portfolio weights assigned to each position Potrero Capital Research allocated the biggest weight to Fiverr International Ltd. (NYSE:FVRR), around 3.62% of its 13F portfolio. Tenzing Global Investors is also relatively very bullish on the stock, designating 0.26 percent of its 13F equity portfolio to FVRR.
Judging by the fact that Fiverr International Ltd. (NYSE:FVRR) has experienced falling interest from the smart money, it's safe to say that there exists a select few hedge funds that decided to sell off their positions entirely in the third quarter. Interestingly, Glen Kacher's Light Street Capital dropped the biggest investment of the 750 funds watched by Insider Monkey, comprising close to $21.4 million in stock, and Israel Englander's Millennium Management was right behind this move, as the fund cut about $4.4 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 4 funds in the third quarter.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Fiverr International Ltd. (NYSE:FVRR) but similarly valued. We will take a look at BlackRock MuniVest Fund, Inc. (NYSE:MVF), Forrester Research, Inc. (NASDAQ:FORR), Karyopharm Therapeutics Inc (NASDAQ:KPTI), and Navigator Holdings Ltd (NYSE:NVGS). All of these stocks' market caps match FVRR's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MVF,1,586,0 FORR,13,46630,3 KPTI,13,232234,0 NVGS,15,276019,1 Average,10.5,138867,1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.5 hedge funds with bullish positions and the average amount invested in these stocks was $139 million. That figure was $9 million in FVRR's case. Navigator Holdings Ltd (NYSE:NVGS) is the most popular stock in this table. On the other hand BlackRock MuniVest Fund, Inc. (NYSE:MVF) is the least popular one with only 1 bullish hedge fund positions. Fiverr International Ltd. (NYSE:FVRR) is not the least popular stock in this group but hedge fund interest is still below average. 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. A small number of hedge funds were also right about betting on FVRR as the stock returned 23% during the first two months of Q4 and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.