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Hedge Funds Have Never Been This Bullish On Airgain, Inc. (AIRG)

Nina Todic

Amid an overall bull market, many stocks that smart money investors were collectively bullish on surged during the first quarter. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 40% and 25% respectively. Our research shows that most of the stocks that smart money likes historically generate strong risk-adjusted returns. That's why we weren't surprised when hedge funds’ top 20 large-cap stock picks generated a return of 18.7% during the first 5 months of 2019 and outperformed the broader market benchmark by 6.6 percentage points.This is why following the smart money sentiment is a useful tool at identifying the next stock to invest in.

Is Airgain, Inc. (NASDAQ:AIRG) ready to rally soon? Hedge funds are in a bullish mood. The number of long hedge fund bets went up by 5 recently. Our calculations also showed that airg isn't among the 30 most popular stocks among hedge funds.

Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (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 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Philip Hempleman Ardsley Partners

Let's take a glance at the fresh hedge fund action surrounding Airgain, Inc. (NASDAQ:AIRG).

What have hedge funds been doing with Airgain, Inc. (NASDAQ:AIRG)?

Heading into the second quarter of 2019, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a change of 125% from one quarter earlier. On the other hand, there were a total of 5 hedge funds with a bullish position in AIRG a year ago. With hedgies' sentiment swirling, there exists a few key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).

No of Hedge Funds with AIRG Positions

Among these funds, Royce & Associates held the most valuable stake in Airgain, Inc. (NASDAQ:AIRG), which was worth $2.3 million at the end of the first quarter. On the second spot was G2 Investment Partners Management which amassed $1.8 million worth of shares. Moreover, Ardsley Partners, Trellus Management Company, and Renaissance Technologies were also bullish on Airgain, Inc. (NASDAQ:AIRG), allocating a large percentage of their portfolios to this stock.

Now, key money managers have been driving this bullishness. Ardsley Partners, managed by Philip Hempleman, created the largest position in Airgain, Inc. (NASDAQ:AIRG). Ardsley Partners had $0.3 million invested in the company at the end of the quarter. Jim Simons's Renaissance Technologies also made a $0.2 million investment in the stock during the quarter. The following funds were also among the new AIRG investors: Israel Englander's Millennium Management, Michael Platt and William Reeves's BlueCrest Capital Mgmt., and Paul Marshall and Ian Wace's Marshall Wace LLP.

Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Airgain, Inc. (NASDAQ:AIRG) but similarly valued. These stocks are Enzo Biochem, Inc. (NYSE:ENZ), CB Financial Services, Inc. (NASDAQ:CBFV), Recro Pharma Inc (NASDAQ:REPH), and Pointer Telocation Limited (NASDAQ:PNTR). All of these stocks' market caps resemble AIRG's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ENZ,6,23375,-1 CBFV,2,1615,0 REPH,11,34989,0 PNTR,4,6939,2 Average,5.75,16730,0.25 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 5.75 hedge funds with bullish positions and the average amount invested in these stocks was $17 million. That figure was $5 million in AIRG's case. Recro Pharma Inc (NASDAQ:REPH) is the most popular stock in this table. On the other hand CB Financial Services, Inc. (NASDAQ:CBFV) is the least popular one with only 2 bullish hedge fund positions. Airgain, Inc. (NASDAQ:AIRG) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Hedge funds were also right about betting on AIRG as the stock returned 11.2% during the same period and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness.

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

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