In this article you are going to find out whether hedge funds think QuinStreet Inc (NASDAQ:QNST) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It's not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
QuinStreet Inc (NASDAQ:QNST) investors should pay attention to an increase in support from the world's most elite money managers lately. QNST was in 22 hedge funds' portfolios at the end of the first quarter of 2020. There were 18 hedge funds in our database with QNST positions at the end of the previous quarter. Our calculations also showed that QNST isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). Video: Watch our video about the top 5 most popular hedge fund stocks.
To most investors, hedge funds are viewed as worthless, old investment vehicles of years past. While there are over 8000 funds with their doors open today, We hone in on the aristocrats of this group, about 850 funds. It is estimated that this group of investors preside over most of the smart money's total asset base, and by paying attention to their top equity investments, Insider Monkey has figured out numerous investment strategies that have historically outstripped the broader indices. Insider Monkey's flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
[caption id="attachment_258236" align="aligncenter" width="396"] Ken Griffin of Citadel Investment Group[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let's take a glance at the latest hedge fund action surrounding QuinStreet Inc (NASDAQ:QNST).
How are hedge funds trading QuinStreet Inc (NASDAQ:QNST)?
At Q1's end, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of 22% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards QNST over the last 18 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in QuinStreet Inc (NASDAQ:QNST) was held by Private Capital Management, which reported holding $26.7 million worth of stock at the end of September. It was followed by Rubric Capital Management with a $22.7 million position. Other investors bullish on the company included Red Cedar Management, Citadel Investment Group, and Portolan Capital Management. In terms of the portfolio weights assigned to each position Red Cedar Management allocated the biggest weight to QuinStreet Inc (NASDAQ:QNST), around 13.35% of its 13F portfolio. Private Capital Management is also relatively very bullish on the stock, dishing out 8.37 percent of its 13F equity portfolio to QNST.
As industrywide interest jumped, key money managers were leading the bulls' herd. Citadel Investment Group, managed by Ken Griffin, initiated the most outsized position in QuinStreet Inc (NASDAQ:QNST). Citadel Investment Group had $7.9 million invested in the company at the end of the quarter. Travis Cocke's Voss Capital also made a $2.1 million investment in the stock during the quarter. The other funds with new positions in the stock are Israel Englander's Millennium Management, Greg Eisner's Engineers Gate Manager, and Peter A. Wright's P.A.W. CAPITAL PARTNERS.
Let's now review hedge fund activity in other stocks similar to QuinStreet Inc (NASDAQ:QNST). These stocks are G1 Therapeutics, Inc. (NASDAQ:GTHX), Energy Recovery, Inc. (NASDAQ:ERII), BioSpecifics Technologies Corp. (NASDAQ:BSTC), and First Community Bancshares Inc (NASDAQ:FCBC). All of these stocks' market caps are closest to QNST's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GTHX,13,25511,2 ERII,11,45757,4 BSTC,9,52752,-2 FCBC,5,8715,-2 Average,9.5,33184,0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.5 hedge funds with bullish positions and the average amount invested in these stocks was $33 million. That figure was $93 million in QNST's case. G1 Therapeutics, Inc. (NASDAQ:GTHX) is the most popular stock in this table. On the other hand First Community Bancshares Inc (NASDAQ:FCBC) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks QuinStreet Inc (NASDAQ:QNST) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks returned 13.9% in 2020 through June 10th but still managed to beat the market by 14.2 percentage points. Hedge funds were also right about betting on QNST as the stock returned 39.1% so far in Q2 (through June 10th) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.