At the end of February we announced the arrival of the first US recession since 2009 and we predicted 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 Fluent, Inc. (NASDAQ:FLNT).
Fluent, Inc. (NASDAQ:FLNT) shareholders have witnessed a decrease in hedge fund sentiment of late. Our calculations also showed that FLNT 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.
In the eyes of most traders, hedge funds are perceived as slow, old financial tools of years past. While there are greater than 8000 funds trading at present, Our experts hone in on the leaders of this group, about 850 funds. Most estimates calculate that this group of people administer bulk of the smart money's total asset base, and by watching their finest investments, Insider Monkey has deciphered many investment strategies that have historically defeated the broader indices. Insider Monkey's flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points a year 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 .
Roger Ibbotson of Zebra Capital Management[/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 analyze the recent hedge fund action regarding Fluent, Inc. (NASDAQ:FLNT).
How are hedge funds trading Fluent, Inc. (NASDAQ:FLNT)?
Heading into the second quarter of 2020, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -13% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in FLNT over the last 18 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Is FLNT A Good Stock To Buy?
The largest stake in Fluent, Inc. (NASDAQ:FLNT) was held by Arrowstreet Capital, which reported holding $0.3 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $0.2 million position. Other investors bullish on the company included Millennium Management, Two Sigma Advisors, and D E Shaw. In terms of the portfolio weights assigned to each position Zebra Capital Management allocated the biggest weight to Fluent, Inc. (NASDAQ:FLNT), around 0.02% of its 13F portfolio. Arrowstreet Capital is also relatively very bullish on the stock, earmarking 0.0009 percent of its 13F equity portfolio to FLNT.
Since Fluent, Inc. (NASDAQ:FLNT) has experienced bearish sentiment from the smart money, it's easy to see that there lies a certain "tier" of funds who sold off their entire stakes in the first quarter. It's worth mentioning that Cliff Asness's AQR Capital Management said goodbye to the largest stake of all the hedgies tracked by Insider Monkey, comprising about $0.6 million in stock. Nick Thakore's fund, Diametric Capital, also dumped its stock, about $0.1 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 1 funds in the first quarter.
Let's also examine hedge fund activity in other stocks similar to Fluent, Inc. (NASDAQ:FLNT). These stocks are Five Star Senior Living Inc. (NYSE:FVE), DASAN Zhone Solutions, Inc. (NASDAQ:DZSI), Champions Oncology, Inc. (NASDAQ:CSBR), and Daseke, Inc. (NASDAQ:DSKE). This group of stocks' market valuations resemble FLNT's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position FVE,7,11825,5 DZSI,5,2817,-1 CSBR,1,1310,0 DSKE,5,1590,-2 Average,4.5,4386,0.5 [/table]
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 $4 million. That figure was $1 million in FLNT's case. Five Star Senior Living Inc. (NYSE:FVE) is the most popular stock in this table. On the other hand Champions Oncology, Inc. (NASDAQ:CSBR) is the least popular one with only 1 bullish hedge fund positions. Fluent, Inc. (NASDAQ:FLNT) 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 13.9% in 2020 through June 10th but still beat the market by 14.2 percentage points. Hedge funds were also right about betting on FLNT as the stock returned 86.3% in Q2 (through June 10th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
