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After several tireless days we have finished crunching the numbers from nearly 750 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Telenav Inc (NASDAQ:TNAV).
Telenav Inc (NASDAQ:TNAV) 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 third quarter of 2019. The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as The New Germany Fund, Inc. (NYSE:GF), Kaleido BioSciences, Inc. (NASDAQ:KLDO), and Applied Optoelectronics Inc (NASDAQ:AAOI) to gather more data points. Our calculations also showed that TNAV isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. 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 Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
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Israel Englander of Millennium Management[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December we recommended Adams Energy based on an under-the-radar fund manager’s investor letter and the stock gained 20 percent. We're going to go over the fresh hedge fund action encompassing Telenav Inc (NASDAQ:TNAV).
How have hedgies been trading Telenav Inc (NASDAQ:TNAV)?
Heading into the fourth quarter of 2019, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. By comparison, 8 hedge funds held shares or bullish call options in TNAV a year ago. 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 Telenav Inc (NASDAQ:TNAV) was held by Nokomis Capital, which reported holding $22.9 million worth of stock at the end of September. It was followed by Divisar Capital with a $10.9 million position. Other investors bullish on the company included Renaissance Technologies, Millennium Management, and Arrowstreet Capital. In terms of the portfolio weights assigned to each position Nokomis Capital allocated the biggest weight to Telenav Inc (NASDAQ:TNAV), around 4.95% of its 13F portfolio. Divisar Capital is also relatively very bullish on the stock, designating 3.62 percent of its 13F equity portfolio to TNAV.
Judging by the fact that Telenav Inc (NASDAQ:TNAV) has witnessed a decline in interest from the smart money, we can see that there were a few hedge funds who sold off their positions entirely last quarter. Intriguingly, John W. Rogers's Ariel Investments dumped the largest position of all the hedgies watched by Insider Monkey, valued at an estimated $10.7 million in stock. Brian C. Freckmann's fund, Lyon Street Capital, also sold off its stock, about $1.6 million worth. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Telenav Inc (NASDAQ:TNAV) but similarly valued. We will take a look at The New Germany Fund, Inc. (NYSE:GF), Kaleido BioSciences, Inc. (NASDAQ:KLDO), Applied Optoelectronics Inc (NASDAQ:AAOI), and SC Health Corporation (NYSE:SCPE). This group of stocks' market valuations are closest to TNAV's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GF,1,309,0 KLDO,5,7555,0 AAOI,10,24696,-3 SCPE,16,73061,16 Average,8,26405,3.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $26 million. That figure was $53 million in TNAV's case. SC Health Corporation (NYSE:SCPE) is the most popular stock in this table. On the other hand The New Germany Fund, Inc. (NYSE:GF) is the least popular one with only 1 bullish hedge fund positions. Telenav Inc (NASDAQ:TNAV) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on TNAV as the stock returned 19.7% during the fourth quarter (through the end of November) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.