We at Insider Monkey have gone over 821 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, near the height of the coronavirus market crash. In this article, we look at what those funds think of The Joint Corp. (NASDAQ:JYNT) based on that data.
Hedge fund interest in The Joint Corp. (NASDAQ:JYNT) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as Washington Prime Group Inc. (NYSE:WPG), Willis Lease Finance Corporation (NASDAQ:WLFC), and Codorus Valley Bancorp, Inc. (NASDAQ:CVLY) to gather more data points. Our calculations also showed that JYNT 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.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
[caption id="attachment_193003" align="aligncenter" width="396"] Chuck Royce of Royce & Associates[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like this one. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when 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 encompassing The Joint Corp. (NASDAQ:JYNT).
What have hedge funds been doing with The Joint Corp. (NASDAQ:JYNT)?
Heading into the second quarter of 2020, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards JYNT over the last 18 quarters. With hedge funds' sentiment swirling, there exists a few notable hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Bandera Partners, managed by Gregory Bylinsky and Jefferson Gramm, holds the biggest position in The Joint Corp. (NASDAQ:JYNT). Bandera Partners has a $18.3 million position in the stock, comprising 15.4% of its 13F portfolio. The second most bullish fund manager is Wilmot B. Harkey and Daniel Mack of Nantahala Capital Management, with a $9.2 million position; 0.3% of its 13F portfolio is allocated to the company. Other peers with similar optimism comprise Charles Paquelet's Skylands Capital, Israel Englander's Millennium Management and Chuck Royce's Royce & Associates. In terms of the portfolio weights assigned to each position Bandera Partners allocated the biggest weight to The Joint Corp. (NASDAQ:JYNT), around 15.38% of its 13F portfolio. Skylands Capital is also relatively very bullish on the stock, setting aside 1.77 percent of its 13F equity portfolio to JYNT.
Seeing as The Joint Corp. (NASDAQ:JYNT) has experienced a decline in interest from the smart money, we can see that there were a few funds who were dropping their entire stakes heading into Q4. It's worth mentioning that Paul Marshall and Ian Wace's Marshall Wace LLP dropped the biggest stake of the 750 funds watched by Insider Monkey, totaling an estimated $0.7 million in stock, and Michael Gelband's ExodusPoint Capital was right behind this move, as the fund cut about $0.3 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's go over hedge fund activity in other stocks similar to The Joint Corp. (NASDAQ:JYNT). These stocks are Washington Prime Group Inc. (NYSE:WPG), Willis Lease Finance Corporation (NASDAQ:WLFC), Codorus Valley Bancorp, Inc. (NASDAQ:CVLY), and Auburn National Bancorporation, Inc. (NASDAQ:AUBN). This group of stocks' market values are closest to JYNT's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position WPG,9,2080,0 WLFC,4,12461,-4 CVLY,4,9861,-1 AUBN,1,266,-1 Average,4.5,6167,-1.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 4.5 hedge funds with bullish positions and the average amount invested in these stocks was $6 million. That figure was $44 million in JYNT's case. Washington Prime Group Inc. (NYSE:WPG) is the most popular stock in this table. On the other hand Auburn National Bancorporation, Inc. (NASDAQ:AUBN) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks The Joint Corp. (NASDAQ:JYNT) 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 13.3% in 2020 through June 25th but still managed to beat the market by 16.8 percentage points. Hedge funds were also right about betting on JYNT as the stock returned 36.2% so far in Q2 (through June 25th) 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.