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. What do these smart investors think about Ooma Inc (NYSE:OOMA)?
Ooma Inc (NYSE:OOMA) investors should pay attention to an increase in activity from the world's largest hedge funds lately. Our calculations also showed that OOMA 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_25762" align="aligncenter" width="331"] Julian Robertson of Tiger Management[/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. Now we're going to check out the fresh hedge fund action encompassing Ooma Inc (NYSE:OOMA).
What does smart money think about Ooma Inc (NYSE:OOMA)?
Heading into the second quarter of 2020, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 8% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards OOMA over the last 18 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Ooma Inc (NYSE:OOMA) was held by Woodson Capital Management, which reported holding $21.6 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $10.9 million position. Other investors bullish on the company included Tiger Management, Headlands Capital, and Royce & Associates. In terms of the portfolio weights assigned to each position Headlands Capital allocated the biggest weight to Ooma Inc (NYSE:OOMA), around 9.54% of its 13F portfolio. Tiger Management is also relatively very bullish on the stock, setting aside 3.53 percent of its 13F equity portfolio to OOMA.
Consequently, key money managers have jumped into Ooma Inc (NYSE:OOMA) headfirst. G2 Investment Partners Management, managed by Josh Goldberg, established the biggest position in Ooma Inc (NYSE:OOMA). G2 Investment Partners Management had $5 million invested in the company at the end of the quarter. Cliff Asness's AQR Capital Management also made a $0.8 million investment in the stock during the quarter. The following funds were also among the new OOMA investors: Paul Marshall and Ian Wace's Marshall Wace LLP and Greg Eisner's Engineers Gate Manager.
Let's also examine hedge fund activity in other stocks similar to Ooma Inc (NYSE:OOMA). We will take a look at Kamada Ltd (NASDAQ:KMDA), Park Aerospace Corp. (NYSE:PKE), TrueCar Inc (NASDAQ:TRUE), and Haynes International, Inc. (NASDAQ:HAYN). All of these stocks' market caps resemble OOMA's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position KMDA,2,6276,-1 PKE,11,52848,-2 TRUE,12,42497,-3 HAYN,9,33451,-5 Average,8.5,33768,-2.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.5 hedge funds with bullish positions and the average amount invested in these stocks was $34 million. That figure was $69 million in OOMA's case. TrueCar Inc (NASDAQ:TRUE) is the most popular stock in this table. On the other hand Kamada Ltd (NASDAQ:KMDA) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Ooma Inc (NYSE:OOMA) 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 OOMA wasn't nearly as popular as these 10 stocks and hedge funds that were betting on OOMA were disappointed as the stock returned 26.4% 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.