Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Summit Wireless Technologies, Inc. (NASDAQ:WISA).
Is WISA a good stock to buy? The smart money was in a bullish mood. The number of bullish hedge fund positions improved by 2 recently. Summit Wireless Technologies, Inc. (NASDAQ:WISA) was in 4 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic was 2. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that WISA isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 2 hedge funds in our database with WISA positions at the end of the fourth quarter.
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 115 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Ken Griffin of Citadel Investment Group
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $27 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. With all of this in mind we're going to take a gander at the latest hedge fund action surrounding Summit Wireless Technologies, Inc. (NASDAQ:WISA).
Do Hedge Funds Think WISA Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 100% from the previous quarter. On the other hand, there were a total of 0 hedge funds with a bullish position in WISA a year ago. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, John Overdeck and David Siegel's Two Sigma Advisors has the most valuable position in Summit Wireless Technologies, Inc. (NASDAQ:WISA), worth close to $0.4 million, corresponding to less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, holding a $0.2 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other members of the smart money with similar optimism consist of Israel Englander's Millennium Management, Ken Griffin's Citadel Investment Group and . In terms of the portfolio weights assigned to each position Two Sigma Advisors allocated the biggest weight to Summit Wireless Technologies, Inc. (NASDAQ:WISA), around 0.0011% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, setting aside 0.0002 percent of its 13F equity portfolio to WISA.
As one would reasonably expect, key money managers were leading the bulls' herd. Two Sigma Advisors, managed by John Overdeck and David Siegel, created the most outsized position in Summit Wireless Technologies, Inc. (NASDAQ:WISA). Two Sigma Advisors had $0.4 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also made a $0 million investment in the stock during the quarter.
Let's now review hedge fund activity in other stocks similar to Summit Wireless Technologies, Inc. (NASDAQ:WISA). We will take a look at Kewaunee Scientific Corporation (NASDAQ:KEQU), Fuwei Films (Holdings) Co., Ltd (NASDAQ:FFHL), Siyata Mobile Inc. (NASDAQ:SYTA), Staffing 360 Solutions, Inc. (NASDAQ:STAF), Evolving Systems Inc (NASDAQ:EVOL), Bonso Electronics International Inc. (NASDAQ:BNSO), and Rocky Mountain Chocolate Factory, Inc. (NASDAQ:RMCF). This group of stocks' market values resemble WISA's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position KEQU,3,3008,0 FFHL,1,2962,0 SYTA,1,755,0 STAF,1,181,0 EVOL,2,2427,0 BNSO,2,1286,1 RMCF,1,2503,0 Average,1.6,1875,0.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 1.6 hedge funds with bullish positions and the average amount invested in these stocks was $2 million. That figure was $1 million in WISA's case. Kewaunee Scientific Corporation (NASDAQ:KEQU) is the most popular stock in this table. On the other hand Fuwei Films (Holdings) Co., Ltd (NASDAQ:FFHL) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Summit Wireless Technologies, Inc. (NASDAQ:WISA) is more popular among hedge funds. Our overall hedge fund sentiment score for WISA is 87. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks returned 17.2% in 2021 through June 11th but still managed to beat the market by 3.3 percentage points. Hedge funds were also right about betting on WISA as the stock returned 39.5% since the end of March (through 6/11) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.