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We at Insider Monkey have gone over 887 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 December 31st. In this article, we look at what those funds think of LiveRamp Holdings, Inc. (NYSE:RAMP) based on that data.
Is RAMP stock a buy? LiveRamp Holdings, Inc. (NYSE:RAMP) was in 24 hedge funds' portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 28. RAMP investors should pay attention to a decrease in activity from the world's largest hedge funds lately. There were 28 hedge funds in our database with RAMP holdings at the end of September. Our calculations also showed that RAMP isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Tim Woolley of Polar Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. 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 we're going to take a glance at the recent hedge fund action surrounding LiveRamp Holdings, Inc. (NYSE:RAMP).
Do Hedge Funds Think RAMP Is A Good Stock To Buy Now?
Heading into the first quarter of 2021, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -14% from one quarter earlier. On the other hand, there were a total of 20 hedge funds with a bullish position in RAMP a year ago. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
More specifically, RGM Capital was the largest shareholder of LiveRamp Holdings, Inc. (NYSE:RAMP), with a stake worth $103.8 million reported as of the end of December. Trailing RGM Capital was Vista Equity Partners, which amassed a stake valued at $40.9 million. Osterweis Capital Management, Polar Capital, and Citadel Investment Group 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 RGM Capital allocated the biggest weight to LiveRamp Holdings, Inc. (NYSE:RAMP), around 4.53% of its 13F portfolio. IvyRock Asset Management is also relatively very bullish on the stock, setting aside 4.39 percent of its 13F equity portfolio to RAMP.
Seeing as LiveRamp Holdings, Inc. (NYSE:RAMP) has faced a decline in interest from the entirety of the hedge funds we track, it's easy to see that there lies a certain "tier" of fund managers that elected to cut their positions entirely in the fourth quarter. Interestingly, David Atterbury's Whetstone Capital Advisors said goodbye to the largest investment of the "upper crust" of funds monitored by Insider Monkey, worth close to $13.5 million in stock. Peter Rathjens, Bruce Clarke and John Campbell's fund, Arrowstreet Capital, also sold off its stock, about $9 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 4 funds in the fourth quarter.
Let's now take a look at hedge fund activity in other stocks similar to LiveRamp Holdings, Inc. (NYSE:RAMP). These stocks are IDACORP Inc (NYSE:IDA), NCR Corporation (NYSE:NCR), SailPoint Technologies Holdings, Inc. (NYSE:SAIL), Curtiss-Wright Corp. (NYSE:CW), TFI International Inc. (NYSE:TFII), BOK Financial Corporation (NASDAQ:BOKF), and Nexstar Media Group, Inc. (NASDAQ:NXST). All of these stocks' market caps are similar to RAMP's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position IDA,14,167230,-17 NCR,32,483312,0 SAIL,32,1002995,3 CW,23,245187,-3 TFII,10,78114,-3 BOKF,26,361027,5 NXST,44,891159,3 Average,25.9,461289,-1.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.9 hedge funds with bullish positions and the average amount invested in these stocks was $461 million. That figure was $257 million in RAMP's case. Nexstar Media Group, Inc. (NASDAQ:NXST) is the most popular stock in this table. On the other hand TFI International Inc. (NYSE:TFII) is the least popular one with only 10 bullish hedge fund positions. LiveRamp Holdings, Inc. (NYSE:RAMP) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for RAMP is 47.3. 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. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and surpassed the market again by 0.9 percentage points. Unfortunately RAMP wasn't nearly as popular as these 30 stocks (hedge fund sentiment was quite bearish); RAMP investors were disappointed as the stock returned -33.8% since the end of December (through 4/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 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.