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Hedge Funds Are Cashing Out Of J2 Global Inc (JCOM)

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The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31st. 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 J2 Global Inc (NASDAQ:JCOM).

Is J2 Global Inc (NASDAQ:JCOM) a buy right now? Hedge funds were reducing their bets on the stock. The number of bullish hedge fund bets dropped by 2 in recent months. J2 Global Inc (NASDAQ:JCOM) was in 22 hedge funds' portfolios at the end of March. The all time high for this statistic is 30. Our calculations also showed that JCOM isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).

In the 21st century investor’s toolkit there are a lot of indicators investors have at their disposal to analyze stocks. Two of the most under-the-radar indicators are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the top picks of the top investment managers can outpace the market by a healthy margin (see the details here). Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Bruce Kovner, Caxton Associates LP
Bruce Kovner, Caxton Associates LP

Bruce Kovner of Caxton Associates LP

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. 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. With all of this in mind we're going to view the fresh hedge fund action encompassing J2 Global Inc (NASDAQ:JCOM).

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

At Q1's end, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -8% from one quarter earlier. By comparison, 21 hedge funds held shares or bullish call options in JCOM a year ago. With hedge funds' sentiment swirling, there exists a select group of noteworthy hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).

More specifically, Cardinal Capital was the largest shareholder of J2 Global Inc (NASDAQ:JCOM), with a stake worth $198.9 million reported as of the end of March. Trailing Cardinal Capital was AQR Capital Management, which amassed a stake valued at $24.6 million. Fisher Asset Management, Royce & Associates, and HBK Investments 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 Cardinal Capital allocated the biggest weight to J2 Global Inc (NASDAQ:JCOM), around 4.87% of its 13F portfolio. Quantinno Capital is also relatively very bullish on the stock, earmarking 0.75 percent of its 13F equity portfolio to JCOM.

Seeing as J2 Global Inc (NASDAQ:JCOM) has faced a decline in interest from the smart money, we can see that there lies a certain "tier" of funds that decided to sell off their full holdings by the end of the first quarter. Intriguingly, David Costen Haley's HBK Investments sold off the largest stake of the 750 funds tracked by Insider Monkey, valued at close to $50.1 million in stock, and Michael Hintze's CQS Cayman LP was right behind this move, as the fund said goodbye to about $25.6 million worth. These transactions are important to note, as aggregate hedge fund interest fell by 2 funds by the end of the first quarter.

Let's go over hedge fund activity in other stocks - not necessarily in the same industry as J2 Global Inc (NASDAQ:JCOM) but similarly valued. These stocks are KBR, Inc. (NYSE:KBR), Perrigo Co Plc (NYSE:PRGO), Ashland Global Holdings Inc.. (NYSE:ASH), Owl Rock Capital Corporation (NYSE:ORCC), Janus Henderson Group plc (NYSE:JHG), Essent Group Ltd (NYSE:ESNT), and 1Life Healthcare, Inc. (NASDAQ:ONEM). This group of stocks' market caps match JCOM's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position KBR,31,1045871,2 PRGO,33,397635,2 ASH,36,1199148,-2 ORCC,20,309298,0 JHG,28,917244,6 ESNT,24,332686,-8 ONEM,30,750776,0 Average,28.9,707523,0 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 28.9 hedge funds with bullish positions and the average amount invested in these stocks was $708 million. That figure was $331 million in JCOM's case. Ashland Global Holdings Inc.. (NYSE:ASH) is the most popular stock in this table. On the other hand Owl Rock Capital Corporation (NYSE:ORCC) is the least popular one with only 20 bullish hedge fund positions. J2 Global Inc (NASDAQ:JCOM) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for JCOM is 31.3. 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 23.8% in 2021 through July 16th and beat the market by 7.7 percentage points. A small number of hedge funds were also right about betting on JCOM, though not to the same extent, as the stock returned 15.8% since the end of Q1 (through July 16th) and outperformed the market.

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