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Last year's fourth quarter was a rough one for investors and many hedge funds, which were naturally unable to overcome the big dip in the broad market, as the S&P 500 fell by about 4.8% during 2018 and average hedge fund losing about 1%. The Russell 2000, composed of smaller companies, performed even worse, trailing the S&P by more than 6 percentage points, as investors fled less-known quantities for safe havens. Luckily hedge funds were shifting their holdings into large-cap stocks. The 20 most popular hedge fund stocks actually generated an average return of 37.4% in 2019 (through the end of November) and outperformed the S&P 500 ETF by 9.9 percentage points. We are done processing the latest 13F filings and in this article we will study how hedge fund sentiment towards Kopin Corporation (NASDAQ:KOPN) changed during the first quarter.
Kopin Corporation (NASDAQ:KOPN) was in 7 hedge funds' portfolios at the end of September. KOPN shareholders have witnessed an increase in enthusiasm from smart money lately. There were 3 hedge funds in our database with KOPN holdings at the end of the previous quarter. Our calculations also showed that KOPN isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most traders, hedge funds are viewed as underperforming, old financial vehicles of yesteryear. While there are greater than 8000 funds in operation at present, We look at the moguls of this group, approximately 750 funds. These investment experts manage most of all hedge funds' total asset base, and by keeping an eye on their highest performing stock picks, Insider Monkey has deciphered various investment strategies that have historically surpassed the market. Insider Monkey's flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points per year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
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Michael Platt of BlueCrest Capital Mgmt.[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius' weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager's investor letter and the stock already gained 20 percent. Keeping this in mind we're going to check out the latest hedge fund action regarding Kopin Corporation (NASDAQ:KOPN).
What does smart money think about Kopin Corporation (NASDAQ:KOPN)?
At the end of the third quarter, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a change of 133% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in KOPN over the last 17 quarters. With hedge funds' sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
Among these funds, Millennium Management held the most valuable stake in Kopin Corporation (NASDAQ:KOPN), which was worth $2.3 million at the end of the third quarter. On the second spot was D E Shaw which amassed $0.6 million worth of shares. Paloma Partners, LMR Partners, 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 Paloma Partners allocated the biggest weight to Kopin Corporation (NASDAQ:KOPN), around 0.0041% of its 13F portfolio. Millennium Management is also relatively very bullish on the stock, setting aside 0.0036 percent of its 13F equity portfolio to KOPN.
As aggregate interest increased, some big names were leading the bulls' herd. Renaissance Technologies, founded by Jim Simons, initiated the most valuable position in Kopin Corporation (NASDAQ:KOPN). Renaissance Technologies had $0 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace's Marshall Wace also made a $0 million investment in the stock during the quarter. The following funds were also among the new KOPN investors: Michael Platt and William Reeves's BlueCrest Capital Mgmt. and Ken Griffin's Citadel Investment Group.
Let's now review hedge fund activity in other stocks similar to Kopin Corporation (NASDAQ:KOPN). These stocks are Spring Bank Pharmaceuticals, Inc. (NASDAQ:SBPH), Motus GI Holdings, Inc. (NASDAQ:MOTS), First Seacoast Bancorp (NASDAQ:FSEA), and North European Oil Royalty (NYSE:NRT). All of these stocks' market caps resemble KOPN's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SBPH,8,13851,1 MOTS,10,13588,1 FSEA,3,2481,3 NRT,1,1412,-1 Average,5.5,7833,1 [/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 $8 million. That figure was $3 million in KOPN's case. Motus GI Holdings, Inc. (NASDAQ:MOTS) is the most popular stock in this table. On the other hand North European Oil Royalty (NYSE:NRT) is the least popular one with only 1 bullish hedge fund positions. Kopin Corporation (NASDAQ:KOPN) 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 KOPN wasn't nearly as popular as these 20 stocks and hedge funds that were betting on KOPN were disappointed as the stock returned -26.5% 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.