Concerns over rising interest rates and expected further rate increases have hit several stocks hard during the fourth quarter. Trends reversed 180 degrees during the first quarter 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 first 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 Mobileiron Inc (NASDAQ:MOBL).
Mobileiron Inc (NASDAQ:MOBL) was in 17 hedge funds' portfolios at the end of the first quarter of 2019. MOBL has seen an increase in hedge fund interest lately. There were 16 hedge funds in our database with MOBL positions at the end of the previous quarter. Our calculations also showed that MOBL 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' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
We're going to take a gander at the fresh hedge fund action surrounding Mobileiron Inc (NASDAQ:MOBL).
How have hedgies been trading Mobileiron Inc (NASDAQ:MOBL)?
At Q1's end, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of 6% from the fourth quarter of 2018. By comparison, 12 hedge funds held shares or bullish call options in MOBL 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.
The largest stake in Mobileiron Inc (NASDAQ:MOBL) was held by Altai Capital, which reported holding $43.5 million worth of stock at the end of March. It was followed by Greenhouse Funds with a $17.6 million position. Other investors bullish on the company included Renaissance Technologies, ACK Asset Management, and Hawk Ridge Management.
Consequently, specific money managers have jumped into Mobileiron Inc (NASDAQ:MOBL) headfirst. Ardsley Partners, managed by Philip Hempleman, initiated the biggest position in Mobileiron Inc (NASDAQ:MOBL). Ardsley Partners had $3.3 million invested in the company at the end of the quarter. Constantinos J. Christofilis's Archon Capital Management also made a $2.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Noam Gottesman's GLG Partners, Jeffrey Talpins's Element Capital Management, and Matthew Hulsizer's PEAK6 Capital Management.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Mobileiron Inc (NASDAQ:MOBL) but similarly valued. These stocks are The Manitowoc Company, Inc. (NYSE:MTW), Midland States Bancorp, Inc. (NASDAQ:MSBI), BlackRock MuniVest Fund, Inc. (NYSE:MVF), and Sorrento Therapeutics Inc (NASDAQ:SRNE). This group of stocks' market values are closest to MOBL's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MTW,20,113807,6 MSBI,4,1643,-3 MVF,1,450,-2 SRNE,5,3048,-1 Average,7.5,29737,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.5 hedge funds with bullish positions and the average amount invested in these stocks was $30 million. That figure was $126 million in MOBL's case. The Manitowoc Company, Inc. (NYSE:MTW) is the most popular stock in this table. On the other hand BlackRock MuniVest Fund, Inc. (NYSE:MVF) is the least popular one with only 1 bullish hedge fund positions. Mobileiron Inc (NASDAQ:MOBL) 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 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Hedge funds were also right about betting on MOBL as the stock returned 2.7% 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.