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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 at Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Stocks kept going up since then. In this article we look at how hedge funds traded LiveRamp Holdings, Inc. (NYSE:RAMP) and determine whether the smart money was really smart about this stock.
LiveRamp Holdings, Inc. (NYSE:RAMP) has experienced an increase in support from the world's most elite money managers recently. LiveRamp Holdings, Inc. (NYSE:RAMP) was in 25 hedge funds' portfolios at the end of June. The all time high for this statistics is 23. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that RAMP isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 56 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 34% through August 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
David Atterbury of Whetstone Capital Advisors
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website to get excerpts of these letters in your inbox. Now we're going to take a glance at the recent hedge fund action encompassing LiveRamp Holdings, Inc. (NYSE:RAMP).
Hedge fund activity in LiveRamp Holdings, Inc. (NYSE:RAMP)
At the end of June, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 56% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards RAMP over the last 20 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, RGM Capital was the largest shareholder of LiveRamp Holdings, Inc. (NYSE:RAMP), with a stake worth $78.1 million reported as of the end of September. Trailing RGM Capital was Arrowstreet Capital, which amassed a stake valued at $18 million. D E Shaw, Whetstone Capital Advisors, and Renaissance Technologies 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 RGM Capital allocated the biggest weight to LiveRamp Holdings, Inc. (NYSE:RAMP), around 4.7% of its 13F portfolio. Whetstone Capital Advisors is also relatively very bullish on the stock, designating 2.33 percent of its 13F equity portfolio to RAMP.
As aggregate interest increased, key hedge funds were breaking ground themselves. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, created the biggest position in LiveRamp Holdings, Inc. (NYSE:RAMP). Arrowstreet Capital had $18 million invested in the company at the end of the quarter. Noam Gottesman's GLG Partners also made a $8.3 million investment in the stock during the quarter. The other funds with brand new RAMP positions are Peter Muller's PDT Partners, Michael Gelband's ExodusPoint Capital, and Joel Greenblatt's Gotham Asset Management.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as LiveRamp Holdings, Inc. (NYSE:RAMP) but similarly valued. These stocks are Plug Power, Inc. (NASDAQ:PLUG), John Bean Technologies Corporation (NYSE:JBT), Advanced Disposal Services, Inc. (NYSE:ADSW), BlackBerry Limited (NYSE:BB), FireEye Inc (NASDAQ:FEYE), National Health Investors Inc (NYSE:NHI), and WD-40 Company (NASDAQ:WDFC). This group of stocks' market valuations resemble RAMP's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PLUG,20,271588,5 JBT,16,93148,4 ADSW,25,719995,4 BB,22,347261,0 FEYE,28,256703,-4 NHI,15,94170,2 WDFC,15,187292,-2 Average,20.1,281451,1.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.1 hedge funds with bullish positions and the average amount invested in these stocks was $281 million. That figure was $181 million in RAMP's case. FireEye Inc (NASDAQ:FEYE) is the most popular stock in this table. On the other hand National Health Investors Inc (NYSE:NHI) is the least popular one with only 15 bullish hedge fund positions. LiveRamp Holdings, Inc. (NYSE:RAMP) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for RAMP is 78.5. 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 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 21.3% in 2020 through September 25th and still beat the market by 17.7 percentage points. Hedge funds were also right about betting on RAMP as the stock returned 24.2% during Q3 (through September 25th) 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.