The government requires hedge funds and wealthy investors that crossed the $100 million equity holdings threshold are required to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on December 31. We at Insider Monkey have made an extensive database of nearly 750 of those elite funds and prominent investors' filings. In this article, we analyze how these elite funds and prominent investors traded Control4 Corp (NASDAQ:CTRL) based on those filings.
Control4 Corp (NASDAQ:CTRL) shares haven't seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 12 hedge funds' portfolios at the end of the fourth quarter of 2018. At the end of this article we will also compare CTRL to other stocks including One Liberty Properties, Inc. (NYSE:OLP), Zymeworks Inc. (NYSE:ZYME), and Mercantile Bank Corp. (NASDAQ:MBWM) to get a better sense of its popularity.
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 flagship best performing hedge funds strategy returned 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 percentage points since its inception (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_746893" align="aligncenter" width="473"] Paul Marshall of Marshall Wace[/caption]
We're going to review the key hedge fund action surrounding Control4 Corp (NASDAQ:CTRL).
What have hedge funds been doing with Control4 Corp (NASDAQ:CTRL)?
At Q4's end, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the second quarter of 2018. By comparison, 11 hedge funds held shares or bullish call options in CTRL a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Jim Simons's Renaissance Technologies has the biggest position in Control4 Corp (NASDAQ:CTRL), worth close to $12.4 million, amounting to less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Millennium Management, led by Israel Englander, holding a $7.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining members of the smart money with similar optimism encompass Paul Marshall and Ian Wace's Marshall Wace LLP, Ken Griffin's Citadel Investment Group and Charles Paquelet's Skylands Capital.
Since Control4 Corp (NASDAQ:CTRL) has witnessed falling interest from the aggregate hedge fund industry, it's easy to see that there exists a select few money managers that slashed their entire stakes by the end of the third quarter. It's worth mentioning that Richard Driehaus's Driehaus Capital dumped the largest position of the 700 funds monitored by Insider Monkey, comprising about $16.6 million in stock, and Steve Cohen's Point72 Asset Management was right behind this move, as the fund dropped about $2.8 million worth. These transactions are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now take a look at hedge fund activity in other stocks similar to Control4 Corp (NASDAQ:CTRL). We will take a look at One Liberty Properties, Inc. (NYSE:OLP), Zymeworks Inc. (NYSE:ZYME), Mercantile Bank Corp. (NASDAQ:MBWM), and CymaBay Therapeutics Inc (NASDAQ:CBAY). All of these stocks' market caps are similar to CTRL's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position OLP,5,22345,-1 ZYME,11,103481,-2 MBWM,6,24700,-2 CBAY,27,186903,4 Average,12.25,84357,-0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.25 hedge funds with bullish positions and the average amount invested in these stocks was $84 million. That figure was $35 million in CTRL's case. CymaBay Therapeutics Inc (NASDAQ:CBAY) is the most popular stock in this table. On the other hand One Liberty Properties, Inc. (NYSE:OLP) is the least popular one with only 5 bullish hedge fund positions. Control4 Corp (NASDAQ:CTRL) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately CTRL wasn't nearly as popular as these 15 stock (hedge fund sentiment was quite bearish); CTRL investors were disappointed as the stock returned -2.2% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.