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The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on September 30th, about a month before the elections. We at Insider Monkey have made an extensive database of more than 817 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded Zedge, Inc. (NYSE:ZDGE) based on those filings.
Zedge, Inc. (NYSE:ZDGE) shareholders have witnessed an increase in hedge fund interest lately. Zedge, Inc. (NYSE:ZDGE) was in 3 hedge funds' portfolios at the end of September. The all time high for this statistics is 5. There were 2 hedge funds in our database with ZDGE positions at the end of the second quarter. Our calculations also showed that ZDGE 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.
In the 21st century investor’s toolkit there are a multitude of signals investors have at their disposal to analyze stocks. A duo of the less known signals are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the top picks of the top money managers can outclass their index-focused peers by a healthy margin (see the details here).
Ken Griffin of Citadel Investment Group
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 10 most profitable companies in the world 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. With all of this in mind let's take a look at the key hedge fund action encompassing Zedge, Inc. (NYSE:ZDGE).
How have hedgies been trading Zedge, Inc. (NYSE:ZDGE)?
At the end of the third quarter, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 50% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards ZDGE over the last 21 quarters. With the smart money's capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
The largest stake in Zedge, Inc. (NYSE:ZDGE) was held by Renaissance Technologies, which reported holding $0.5 million worth of stock at the end of September. It was followed by Kahn Brothers with a $0.2 million position. The only other hedge fund that is bullish on the company was Citadel Investment Group.
With a general bullishness amongst the heavyweights, specific money managers were leading the bulls' herd. Citadel Investment Group, managed by Ken Griffin, assembled the most valuable position in Zedge, Inc. (NYSE:ZDGE). Citadel Investment Group had $0 million invested in the company at the end of the quarter.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Zedge, Inc. (NYSE:ZDGE) but similarly valued. We will take a look at Guardion Health Sciences, Inc. (NASDAQ:GHSI), GEE Group, Inc. (NYSE:JOB), Helius Medical Technologies, Inc. (NASDAQ:HSDT), Hancock Jaffe Laboratories, Inc. (NASDAQ:HJLI), Sphere 3D Corp. (NASDAQ:ANY), General Moly, Inc. (NYSE:GMO), and Kubient, Inc. (NASDAQ:KBNT). This group of stocks' market values are closest to ZDGE's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GHSI,2,94,1 JOB,3,324,1 HSDT,2,419,1 HJLI,1,56,0 ANY,2,409,0 GMO,1,3,-1 KBNT,2,411,2 Average,1.9,245,0.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 1.9 hedge funds with bullish positions and the average amount invested in these stocks was $0 million. That figure was $1 million in ZDGE's case. General Employment Enterprises, Inc. (NYSE:JOB) is the most popular stock in this table. On the other hand Hancock Jaffe Laboratories, Inc. (NASDAQ:HJLI) is the least popular one with only 1 bullish hedge fund positions. Zedge, Inc. (NYSE:ZDGE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ZDGE is 74. 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 28.1% in 2020 through November 23rd and still beat the market by 15.4 percentage points. Hedge funds were also right about betting on ZDGE as the stock returned 179.5% since the end of Q3 (through 11/23) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.