Concerns over rising interest rates and expected further rate increases have hit several stocks hard during the fourth quarter of 2018. Trends reversed 180 degrees in 2019 amid Powell's pivot and optimistic expectations towards a trade deal with China. Hedge funds and institutional investors tracked by Insider Monkey usually invest a disproportionate amount of their portfolios in smaller cap stocks. We have been receiving indications that hedge funds were increasing their overall exposure in the third quarter and this is one of the factors behind the recent movements in major indices. In this article, we will take a closer look at hedge fund sentiment towards VOXX International Corp (NASDAQ:VOXX).
Is VOXX International Corp (NASDAQ:VOXX) a bargain? Money managers are taking a bearish view. The number of bullish hedge fund positions were trimmed by 1 recently. Our calculations also showed that VOXX isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). VOXX was in 8 hedge funds' portfolios at the end of September. There were 9 hedge funds in our database with VOXX 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.
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Hedge fund activity in VOXX International Corp (NASDAQ:VOXX)
Heading into the fourth quarter of 2019, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -11% from the second quarter of 2019. On the other hand, there were a total of 14 hedge funds with a bullish position in VOXX 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.
More specifically, Kahn Brothers was the largest shareholder of VOXX International Corp (NASDAQ:VOXX), with a stake worth $19.1 million reported as of the end of September. Trailing Kahn Brothers was Royce & Associates, which amassed a stake valued at $4.2 million. Renaissance Technologies, Ancora Advisors, and Fondren Management 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 Kahn Brothers allocated the biggest weight to VOXX International Corp (NASDAQ:VOXX), around 2.39% of its 13F portfolio. Fondren Management is also relatively very bullish on the stock, setting aside 0.75 percent of its 13F equity portfolio to VOXX.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: PDT Partners. 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 none of the 750+ hedge funds tracked by Insider Monkey identified VOXX as a viable investment and initiated a position in the stock.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as VOXX International Corp (NASDAQ:VOXX) but similarly valued. We will take a look at Airgain, Inc. (NASDAQ:AIRG), ATIF Holdings Limited (NASDAQ:ATIF), Medley Management Inc (NYSE:MDLY), and Astro-Med, Inc. (NASDAQ:ALOT). All of these stocks' market caps are closest to VOXX's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AIRG,12,6745,6 ATIF,1,69,0 MDLY,3,2974,-2 ALOT,6,14553,-2 Average,5.5,6085,0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.5 hedge funds with bullish positions and the average amount invested in these stocks was $6 million. That figure was $29 million in VOXX's case. Airgain, Inc. (NASDAQ:AIRG) is the most popular stock in this table. On the other hand ATIF Holdings Limited (NASDAQ:ATIF) is the least popular one with only 1 bullish hedge fund positions. VOXX International Corp (NASDAQ:VOXX) 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 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately VOXX wasn't nearly as popular as these 20 stocks and hedge funds that were betting on VOXX were disappointed as the stock returned -1.3% during the fourth quarter (through the end of November) 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.