The 700+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of June 28. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Forrester Research, Inc. (NASDAQ:FORR).
Forrester Research, Inc. (NASDAQ:FORR) was in 10 hedge funds' portfolios at the end of the second quarter of 2019. FORR investors should pay attention to a decrease in support from the world's most elite money managers in recent months. There were 13 hedge funds in our database with FORR positions at the end of the previous quarter. Our calculations also showed that FORR isn't among the 30 most popular stocks among hedge funds (see the video below). 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 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We're going to review the recent hedge fund action surrounding Forrester Research, Inc. (NASDAQ:FORR).
How are hedge funds trading Forrester Research, Inc. (NASDAQ:FORR)?
At the end of the second quarter, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -23% from the previous quarter. On the other hand, there were a total of 9 hedge funds with a bullish position in FORR a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Renaissance Technologies held the most valuable stake in Forrester Research, Inc. (NASDAQ:FORR), which was worth $39.5 million at the end of the second quarter. On the second spot was ACK Asset Management which amassed $8.5 million worth of shares. Moreover, Citadel Investment Group, GLG Partners, and Millennium Management were also bullish on Forrester Research, Inc. (NASDAQ:FORR), allocating a large percentage of their portfolios to this stock.
Judging by the fact that Forrester Research, Inc. (NASDAQ:FORR) has faced declining sentiment from hedge fund managers, it's easy to see that there was a specific group of money managers that elected to cut their positions entirely in the second quarter. At the top of the heap, Peter Muller's PDT Partners dropped the largest position of the 750 funds tracked by Insider Monkey, totaling close to $0.5 million in stock, and Roger Ibbotson's Zebra Capital Management was right behind this move, as the fund dropped about $0.3 million worth. These transactions are interesting, as total hedge fund interest was cut by 3 funds in the second quarter.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Forrester Research, Inc. (NASDAQ:FORR) but similarly valued. We will take a look at Mercantil Bank Holding Corporation (NASDAQ:AMTB), Solar Capital Ltd. (NASDAQ:SLRC), Yiren Digital Ltd. (NYSE:YRD), and Chatham Lodging Trust (NYSE:CLDT). All of these stocks' market caps match FORR's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AMTB,1,7607,-4 SLRC,12,59440,1 YRD,3,6214,0 CLDT,8,53463,1 Average,6,31681,-0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $32 million. That figure was $61 million in FORR's case. Solar Capital Ltd. (NASDAQ:SLRC) is the most popular stock in this table. On the other hand Mercantil Bank Holding Corporation (NASDAQ:AMTB) is the least popular one with only 1 bullish hedge fund positions. Forrester Research, Inc. (NASDAQ:FORR) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately FORR wasn't nearly as popular as these 20 stocks and hedge funds that were betting on FORR were disappointed as the stock returned -31.7% during the third 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 many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.