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Hedge Funds Have Never Been This Bullish On Digital Turbine Inc (APPS)

Reymerlyn Martin

We at Insider Monkey have gone over 738 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds' and investors' portfolio positions as of March 31st. In this article, we look at what those funds think of Digital Turbine Inc (NASDAQ:APPS) based on that data.

Digital Turbine Inc (NASDAQ:APPS) has experienced an increase in hedge fund sentiment of late. Our calculations also showed that APPS isn't among the 30 most popular stocks among hedge funds.

Why do we pay any attention at all to hedge fund sentiment? 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.

Richard Driehaus

We're going to go over the fresh hedge fund action regarding Digital Turbine Inc (NASDAQ:APPS).

Hedge fund activity in Digital Turbine Inc (NASDAQ:APPS)

At the end of the first quarter, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 50% from the fourth quarter of 2018. By comparison, 13 hedge funds held shares or bullish call options in APPS a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

APPS_jun2019

More specifically, Millennium Management was the largest shareholder of Digital Turbine Inc (NASDAQ:APPS), with a stake worth $3.2 million reported as of the end of March. Trailing Millennium Management was Trellus Management Company, which amassed a stake valued at $3 million. P.A.W. CAPITAL PARTNERS, Arrowstreet Capital, and Driehaus Capital were also very fond of the stock, giving the stock large weights in their portfolios.

With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. Driehaus Capital, managed by Richard Driehaus, initiated the most outsized position in Digital Turbine Inc (NASDAQ:APPS). Driehaus Capital had $1.4 million invested in the company at the end of the quarter. Mark Broach's Manatuck Hill Partners also made a $1.1 million investment in the stock during the quarter. The other funds with brand new APPS positions are Jim Simons's Renaissance Technologies, Chuck Royce's Royce & Associates, and Michael Platt and William Reeves's BlueCrest Capital Mgmt..

Let's go over hedge fund activity in other stocks similar to Digital Turbine Inc (NASDAQ:APPS). We will take a look at American Superconductor Corporation (NASDAQ:AMSC), Solar Senior Capital Ltd (NASDAQ:SUNS), Protective Insurance Corporation (NASDAQ:PTVCB), and Neuronetics, Inc. (NASDAQ:STIM). This group of stocks' market valuations resemble APPS's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AMSC,16,46521,9 SUNS,2,851,1 PTVCB,7,27866,1 STIM,2,2767,-4 Average,6.75,19501,1.75 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 6.75 hedge funds with bullish positions and the average amount invested in these stocks was $20 million. That figure was $17 million in APPS's case. American Superconductor Corporation (NASDAQ:AMSC) is the most popular stock in this table. On the other hand Solar Senior Capital Ltd (NASDAQ:SUNS) is the least popular one with only 2 bullish hedge fund positions. Digital Turbine Inc (NASDAQ:APPS) 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 APPS as the stock returned 35.1% 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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