The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Adesto Technologies Corporation (NASDAQ:IOTS).
Adesto Technologies Corporation (NASDAQ:IOTS) shares haven't seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 15 hedge funds' portfolios at the end of the first quarter of 2020. At the end of this article we will also compare IOTS to other stocks including New Gold Inc. (NYSE:NGD), 89bio, Inc. (NASDAQ:ETNB), and Organigram Holdings Inc. (NASDAQ:OGI) to get a better sense of its popularity. Video: Watch our video about the top 5 most popular hedge fund stocks.
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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 percentage points since March 2017 (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 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_750227" align="aligncenter" width="397"] Alex Litowitz of Magnetar Capital[/caption]
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, blockchain technology's influence will go beyond online payments. So, we are checking out this futurist's moonshot opportunities in tech stocks. We interview hedge fund managers and ask them about their best ideas. 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 the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we're going to view the new hedge fund action encompassing Adesto Technologies Corporation (NASDAQ:IOTS).
What does smart money think about Adesto Technologies Corporation (NASDAQ:IOTS)?
At the end of the first quarter, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards IOTS over the last 18 quarters. With hedge funds' sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
Among these funds, Magnetar Capital held the most valuable stake in Adesto Technologies Corporation (NASDAQ:IOTS), which was worth $22.3 million at the end of the third quarter. On the second spot was Melqart Asset Management which amassed $15 million worth of shares. Water Island Capital, Millennium Management, and Nokomis Capital 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 Nokomis Capital allocated the biggest weight to Adesto Technologies Corporation (NASDAQ:IOTS), around 3.19% of its 13F portfolio. Melqart Asset Management is also relatively very bullish on the stock, designating 1.48 percent of its 13F equity portfolio to IOTS.
Judging by the fact that Adesto Technologies Corporation (NASDAQ:IOTS) has faced declining sentiment from hedge fund managers, it's easy to see that there is a sect of hedge funds that decided to sell off their entire stakes last quarter. Interestingly, Richard Driehaus's Driehaus Capital cut the largest investment of the 750 funds tracked by Insider Monkey, comprising about $6.5 million in stock. Richard Mashaal's fund, Rima Senvest Management, also cut its stock, about $5.3 million worth. These bearish behaviors are interesting, 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 Adesto Technologies Corporation (NASDAQ:IOTS). These stocks are New Gold Inc. (NYSE:NGD), 89bio, Inc. (NASDAQ:ETNB), Organigram Holdings Inc. (NASDAQ:OGI), and Customers Bancorp Inc (NYSE:CUBI). All of these stocks' market caps resemble IOTS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NGD,10,34981,-2 ETNB,3,187170,-3 OGI,7,2666,2 CUBI,13,25069,-3 Average,8.25,62472,-1.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.25 hedge funds with bullish positions and the average amount invested in these stocks was $62 million. That figure was $77 million in IOTS's case. Customers Bancorp Inc (NYSE:CUBI) is the most popular stock in this table. On the other hand 89bio, Inc. (NASDAQ:ETNB) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Adesto Technologies Corporation (NASDAQ:IOTS) 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 gained 13.3% in 2020 through June 25th and still beat the market by 16.8 percentage points. Unfortunately IOTS wasn't nearly as popular as these 10 stocks and hedge funds that were betting on IOTS were disappointed as the stock returned 12.2% during the second quarter (through June 25th) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.