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At Insider Monkey, we pore over the filings of nearly 817 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we've gathered as a result gives us access to a wealth of collective knowledge based on these firms' portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not Support.com, Inc. (NASDAQ:SPRT) makes for a good investment right now.
Support.com, Inc. (NASDAQ:SPRT) investors should pay attention to an increase in enthusiasm from smart money of late. Support.com, Inc. (NASDAQ:SPRT) was in 6 hedge funds' portfolios at the end of September. The all time high for this statistics is 8. Our calculations also showed that SPRT isn't among the 30 most popular stocks among hedge funds (click for Q3 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 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 13% through November 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Israel Englander of Millennium Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now let's check out the fresh hedge fund action encompassing Support.com, Inc. (NASDAQ:SPRT).
What have hedge funds been doing with Support.com, Inc. (NASDAQ:SPRT)?
At Q3's end, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards SPRT over the last 21 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Fondren Management was the largest shareholder of Support.com, Inc. (NASDAQ:SPRT), with a stake worth $2.3 million reported as of the end of September. Trailing Fondren Management was Renaissance Technologies, which amassed a stake valued at $1.7 million. Lynrock Lake, Bailard Inc, and Minerva Advisors 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 Fondren Management allocated the biggest weight to Support.com, Inc. (NASDAQ:SPRT), around 13.84% of its 13F portfolio. Minerva Advisors is also relatively very bullish on the stock, designating 0.07 percent of its 13F equity portfolio to SPRT.
As industrywide interest jumped, key hedge funds were leading the bulls' herd. Millennium Management, managed by Israel Englander, initiated the biggest position in Support.com, Inc. (NASDAQ:SPRT). Millennium Management had $0 million invested in the company at the end of the quarter.
Let's now take a look at hedge fund activity in other stocks similar to Support.com, Inc. (NASDAQ:SPRT). We will take a look at Newgioco Group, Inc. (NYSE:NWGI), Virco Mfg. Corporation (NASDAQ:VIRC), Altisource Asset Management Corp (NYSE:AAMC), Steel Connect, Inc. (NASDAQ:STCN), A. H. Belo Corporation (NYSE:AHC), Flanigan's Enterprises, Inc. (NYSE:BDL), and Bellicum Pharmaceuticals Inc (NASDAQ:BLCM). This group of stocks' market caps are closest to SPRT's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NWGI,1,207,1 VIRC,3,2890,1 AAMC,1,773,0 STCN,4,12436,0 AHC,4,2794,-1 BDL,1,1135,0 BLCM,3,3376,-1 Average,2.4,3373,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 2.4 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $5 million in SPRT's case. Steel Connect, Inc. (NASDAQ:STCN) is the most popular stock in this table. On the other hand Newgioco Group, Inc. (NYSE:NWGI) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Support.com, Inc. (NASDAQ:SPRT) is more popular among hedge funds. Our overall hedge fund sentiment score for SPRT is 78.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. Unfortunately SPRT wasn't nearly as popular as these 20 stocks and hedge funds that were betting on SPRT were disappointed as the stock returned 6.7% since the end of the third quarter (through 11/27) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.