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 Zix Corporation (NASDAQ:ZIXI) based on that data.
Zix Corporation (NASDAQ:ZIXI) investors should be aware of a decrease in support from the world's most elite money managers of late. Our calculations also showed that ZIXI 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.
According to most stock holders, hedge funds are assumed to be slow, old investment tools of years past. While there are greater than 8000 funds with their doors open at present, Our researchers look at the masters of this group, around 850 funds. These hedge fund managers administer the majority of the smart money's total asset base, and by watching their top equity investments, Insider Monkey has spotted various investment strategies that have historically outpaced Mr. Market. Insider Monkey's flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
[caption id="attachment_339354" align="aligncenter" width="398"] Matthew Drapkin of Becker Drapkin Management[/caption]
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, blockchain technology's influence will go beyond online payments. So, we are checking out this futurist's moonshot opportunities in tech stocks. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we're going to take a glance at the new hedge fund action surrounding Zix Corporation (NASDAQ:ZIXI).
How have hedgies been trading Zix Corporation (NASDAQ:ZIXI)?
Heading into the second quarter of 2020, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -6% from the previous quarter. The graph below displays the number of hedge funds with bullish position in ZIXI over the last 18 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies has the largest position in Zix Corporation (NASDAQ:ZIXI), worth close to $10.8 million, corresponding to less than 0.1%% of its total 13F portfolio. The second most bullish fund manager is George McCabe of Portolan Capital Management, with a $8.8 million position; the fund has 1.3% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that are bullish consist of Matthew Drapkin and Steven R. Becker's Becker Drapkin Management, Israel Englander's Millennium Management and Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital. In terms of the portfolio weights assigned to each position Becker Drapkin Management allocated the biggest weight to Zix Corporation (NASDAQ:ZIXI), around 5.22% of its 13F portfolio. Portolan Capital Management is also relatively very bullish on the stock, dishing out 1.32 percent of its 13F equity portfolio to ZIXI.
Judging by the fact that Zix Corporation (NASDAQ:ZIXI) has experienced a decline in interest from the aggregate hedge fund industry, logic holds that there exists a select few money managers that slashed their entire stakes heading into Q4. Intriguingly, Peter S. Park's Park West Asset Management dropped the largest investment of the "upper crust" of funds monitored by Insider Monkey, totaling about $18.2 million in stock, and David Harding's Winton Capital Management was right behind this move, as the fund said goodbye to about $1.3 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 1 funds heading into Q4.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Zix Corporation (NASDAQ:ZIXI) but similarly valued. These stocks are PolyMet Mining Corp. (NYSE:PLM), Southern National Bancorp of Virginia, Inc (NASDAQ:SONA), PCSB Financial Corporation (NASDAQ:PCSB), and The Michaels Companies Inc (NASDAQ:MIK). This group of stocks' market caps are closest to ZIXI's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PLM,3,395,1 SONA,10,13333,1 PCSB,10,18293,-1 MIK,22,32826,-4 Average,11.25,16212,-0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.25 hedge funds with bullish positions and the average amount invested in these stocks was $16 million. That figure was $32 million in ZIXI's case. The Michaels Companies Inc (NASDAQ:MIK) is the most popular stock in this table. On the other hand PolyMet Mining Corp. (NYSE:PLM) is the least popular one with only 3 bullish hedge fund positions. Zix Corporation (NASDAQ:ZIXI) 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 13.3% in 2020 through June 25th but still beat the market by 16.8 percentage points. Hedge funds were also right about betting on ZIXI as the stock returned 48.5% in Q2 (through June 25th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.