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At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Genasys Inc. (NASDAQ:GNSS).
Genasys Inc. (NASDAQ:GNSS) shares haven't seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 6 hedge funds' portfolios at the end of March. At the end of this article we will also compare GNSS to other stocks including Points International Ltd (NASDAQ:PCOM), Oconee Federal Financial (NASDAQ:OFED), and Calyxt, Inc. (NASDAQ:CLXT) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the 21st century investor’s toolkit there are dozens of methods stock traders can use to analyze their stock investments. Some of the most underrated methods are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the best picks of the elite money managers can outclass the S&P 500 by a healthy margin (see the details here).
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Louis Navellier of Navellier & Associates[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we're going to view the key hedge fund action regarding Genasys Inc. (NASDAQ:GNSS).
What have hedge funds been doing with Genasys Inc. (NASDAQ:GNSS)?
At the end of the first quarter, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the fourth quarter of 2019. On the other hand, there were a total of 3 hedge funds with a bullish position in GNSS a year ago. With the smart money's sentiment swirling, there exists a few noteworthy hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Mark Broach's Manatuck Hill Partners has the most valuable position in Genasys Inc. (NASDAQ:GNSS), worth close to $9.8 million, comprising 9% of its total 13F portfolio. The second largest stake is held by Renaissance Technologies, led by Jim Simons (founder), holding a $1.4 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other professional money managers that are bullish consist of Chuck Royce's Royce & Associates, Louis Navellier's Navellier & Associates and Israel Englander's Millennium Management. In terms of the portfolio weights assigned to each position Manatuck Hill Partners allocated the biggest weight to Genasys Inc. (NASDAQ:GNSS), around 9% of its 13F portfolio. Navellier & Associates is also relatively very bullish on the stock, dishing out 0.05 percent of its 13F equity portfolio to GNSS.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Algert Coldiron Investors. One hedge fund selling its entire position doesn't always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don't think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was ExodusPoint Capital).
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Genasys Inc. (NASDAQ:GNSS) but similarly valued. These stocks are Points International Ltd (NASDAQ:PCOM), Oconee Federal Financial (NASDAQ:OFED), Calyxt, Inc. (NASDAQ:CLXT), and BioSig Technologies, Inc. (NASDAQ:BSGM). This group of stocks' market caps resemble GNSS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PCOM,10,18498,3 OFED,1,332,0 CLXT,4,2098,0 BSGM,1,75,-1 Average,4,5251,0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 4 hedge funds with bullish positions and the average amount invested in these stocks was $5 million. That figure was $12 million in GNSS's case. Points International Ltd (NASDAQ:PCOM) is the most popular stock in this table. On the other hand Oconee Federal Financial (NASDAQ:OFED) is the least popular one with only 1 bullish hedge fund positions. Genasys Inc. (NASDAQ:GNSS) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th but still beat the market by 14.2 percentage points. Hedge funds were also right about betting on GNSS as the stock returned 83.2% in Q2 (through June 10th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.