In this article you are going to find out whether hedge funds think PowerFleet, Inc. (NASDAQ:PWFL) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It's not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Is PWFL a good stock to buy now? PowerFleet, Inc. (NASDAQ:PWFL) investors should be aware of a decrease in enthusiasm from smart money of late. PowerFleet, Inc. (NASDAQ:PWFL) was in 9 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistic is 15. Our calculations also showed that PWFL 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.
At the moment there are numerous metrics investors put to use to grade publicly traded companies. A duo of the most innovative metrics are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the top picks of the best money managers can outpace the S&P 500 by a healthy margin (see the details here).
Philip Hempleman Ardsley Partners
Philip Hempleman of Ardsley Partners
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 15 best blue chip stocks 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. Now we're going to view the recent hedge fund action regarding PowerFleet, Inc. (NASDAQ:PWFL).
Do Hedge Funds Think PWFL Is A Good Stock To Buy Now?
At third quarter's end, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -18% from the second quarter of 2020. By comparison, 11 hedge funds held shares or bullish call options in PWFL a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Cannell Capital was the largest shareholder of PowerFleet, Inc. (NASDAQ:PWFL), with a stake worth $11.8 million reported as of the end of September. Trailing Cannell Capital was North Run Capital, which amassed a stake valued at $8.7 million. Private Capital Management, Ardsley Partners, and Renaissance Technologies were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position North Run Capital allocated the biggest weight to PowerFleet, Inc. (NASDAQ:PWFL), around 10.03% of its 13F portfolio. Cannell Capital is also relatively very bullish on the stock, setting aside 4.32 percent of its 13F equity portfolio to PWFL.
Since PowerFleet, Inc. (NASDAQ:PWFL) has witnessed falling interest from hedge fund managers, it's safe to say that there was a specific group of hedgies that elected to cut their positions entirely by the end of the third quarter. At the top of the heap, Ali Motamed's Invenomic Capital Management dropped the largest stake of the "upper crust" of funds watched by Insider Monkey, worth an estimated $0.1 million in stock. Israel Englander's fund, Millennium Management, also dumped its stock, about $0.1 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 2 funds by the end of the third quarter.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as PowerFleet, Inc. (NASDAQ:PWFL) but similarly valued. These stocks are Select Interior Concepts, Inc. (NASDAQ:SIC), Atlantic Power Corp (NYSE:AT), IDT Corporation (NYSE:IDT), Mohawk Group Holdings, Inc. (NASDAQ:MWK), FS Bancorp, Inc. (NASDAQ:FSBW), Aurora Mobile Limited (NASDAQ:JG), and Sky Solar Holdings, Ltd. (NASDAQ:SKYS). This group of stocks' market valuations resemble PWFL's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SIC,17,30218,1 AT,12,11716,-1 IDT,7,20910,1 MWK,4,8703,1 FSBW,5,11860,1 JG,1,389,0 SKYS,1,426,0 Average,6.7,12032,0.4 [/table]
As you can see these stocks had an average of 6.7 hedge funds with bullish positions and the average amount invested in these stocks was $12 million. That figure was $39 million in PWFL's case. Select Interior Concepts, Inc. (NASDAQ:SIC) is the most popular stock in this table. On the other hand Aurora Mobile Limited (NASDAQ:JG) is the least popular one with only 1 bullish hedge fund positions. PowerFleet, Inc. (NASDAQ:PWFL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PWFL is 46. 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 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. Hedge funds were also right about betting on PWFL as the stock returned 23.1% since the end of Q3 (through 12/8) 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.
