We at Insider Monkey have gone over 821 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 March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of U.S. Auto Parts Network, Inc. (NASDAQ:PRTS) based on that data.
U.S. Auto Parts Network, Inc. (NASDAQ:PRTS) has experienced an increase in activity from the world's largest hedge funds recently. PRTS was in 5 hedge funds' portfolios at the end of March. There were 2 hedge funds in our database with PRTS holdings at the end of the previous quarter. Our calculations also showed that PRTS 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.
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 58 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 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_258236" align="aligncenter" width="400"] Ken Griffin of Citadel Investment Group[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let's take a look at the latest hedge fund action surrounding U.S. Auto Parts Network, Inc. (NASDAQ:PRTS).
How are hedge funds trading U.S. Auto Parts Network, Inc. (NASDAQ:PRTS)?
Heading into the second quarter of 2020, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 150% from the previous quarter. On the other hand, there were a total of 2 hedge funds with a bullish position in PRTS 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 U.S. Auto Parts Network, Inc. (NASDAQ:PRTS) was held by Cannell Capital, which reported holding $3 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $3 million position. Other investors bullish on the company included Millennium Management, SG Capital Management, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Cannell Capital allocated the biggest weight to U.S. Auto Parts Network, Inc. (NASDAQ:PRTS), around 1.25% of its 13F portfolio. SG Capital Management is also relatively very bullish on the stock, earmarking 0.04 percent of its 13F equity portfolio to PRTS.
As industrywide interest jumped, key hedge funds have been driving this bullishness. Millennium Management, managed by Israel Englander, assembled the largest position in U.S. Auto Parts Network, Inc. (NASDAQ:PRTS). Millennium Management had $0.1 million invested in the company at the end of the quarter. Ken Grossman and Glen Schneider's SG Capital Management also made a $0.1 million investment in the stock during the quarter. The only other fund with a new position in the stock is Ken Griffin's Citadel Investment Group.
Let's check out hedge fund activity in other stocks similar to U.S. Auto Parts Network, Inc. (NASDAQ:PRTS). We will take a look at Vaccinex, Inc. (NASDAQ:VCNX), Marchex, Inc. (NASDAQ:MCHX), Perma-Fix Environmental Services, Inc. (NASDAQ:PESI), and Emclaire Financial Corp (NASDAQ:EMCF). This group of stocks' market caps resemble PRTS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position VCNX,2,4825,0 MCHX,12,11894,-5 PESI,2,1692,-1 EMCF,2,539,0 Average,4.5,4738,-1.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 4.5 hedge funds with bullish positions and the average amount invested in these stocks was $5 million. That figure was $6 million in PRTS's case. Marchex, Inc. (NASDAQ:MCHX) is the most popular stock in this table. On the other hand Vaccinex, Inc. (NASDAQ:VCNX) is the least popular one with only 2 bullish hedge fund positions. U.S. Auto Parts Network, Inc. (NASDAQ:PRTS) is not the most popular stock in this group but hedge fund interest is still above average. 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 8.3% in 2020 through the end of May but still beat the market by 13.2 percentage points. Hedge funds were also right about betting on PRTS as the stock returned 298.3% in Q2 (through the end of May) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.