Do Hedge Funds Still Like LiveRamp Holdings, Inc. (RAMP)?

·6 min read

We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn't mean that they don't have occasional colossal losses; they do (like Melvin Capital's recent GameStop losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards LiveRamp Holdings, Inc. (NYSE:RAMP).

LiveRamp Holdings, Inc. (NYSE:RAMP) investors should be aware of a decrease in support from the world's most elite money managers in recent months. LiveRamp Holdings, Inc. (NYSE:RAMP) was in 25 hedge funds' portfolios at the end of June. The all time high for this statistic is 28. Our calculations also showed that RAMP isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).

Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can't expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds' moves today.

Izzy Englander of MILLENNIUM MANAGEMENT
Izzy Englander of MILLENNIUM MANAGEMENT

Israel Englander of Millennium Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. With all of this in mind let's analyze the new hedge fund action regarding LiveRamp Holdings, Inc. (NYSE:RAMP).

Do Hedge Funds Think RAMP Is A Good Stock To Buy Now?

At the end of the second quarter, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of -4% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards RAMP over the last 24 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, RGM Capital held the most valuable stake in LiveRamp Holdings, Inc. (NYSE:RAMP), which was worth $136.5 million at the end of the second quarter. On the second spot was Renaissance Technologies which amassed $33.3 million worth of shares. D E Shaw, Islet Management, and Washington Harbour Partners 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 RGM Capital allocated the biggest weight to LiveRamp Holdings, Inc. (NYSE:RAMP), around 6.32% of its 13F portfolio. Washington Harbour Partners is also relatively very bullish on the stock, setting aside 3.36 percent of its 13F equity portfolio to RAMP.

Because LiveRamp Holdings, Inc. (NYSE:RAMP) has experienced falling interest from the smart money, it's safe to say that there were a few funds who were dropping their positions entirely in the second quarter. It's worth mentioning that Robert Smith's Vista Equity Partners said goodbye to the largest investment of the "upper crust" of funds followed by Insider Monkey, worth close to $35.7 million in stock. Dmitry Balyasny's fund, Balyasny Asset Management, also dropped its stock, about $6.9 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 1 funds in the second quarter.

Let's check out hedge fund activity in other stocks similar to LiveRamp Holdings, Inc. (NYSE:RAMP). These stocks are VEON Ltd. (NASDAQ:VEON), Copa Holdings, S.A. (NYSE:CPA), Cronos Group Inc. (NASDAQ:CRON), Independent Bank Group Inc (NASDAQ:IBTX), Equity Commonwealth (NYSE:EQC), Globalstar, Inc. (NYSE:GSAT), and Owens & Minor, Inc. (NYSE:OMI). This group of stocks' market caps are closest to RAMP's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position VEON,13,51452,5 CPA,14,205970,-4 CRON,8,102753,-2 IBTX,6,70228,-3 EQC,23,159058,2 GSAT,11,166292,1 OMI,20,295357,4 Average,13.6,150159,0.4 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.6 hedge funds with bullish positions and the average amount invested in these stocks was $150 million. That figure was $332 million in RAMP's case. Equity Commonwealth (NYSE:EQC) is the most popular stock in this table. On the other hand Independent Bank Group Inc (NASDAQ:IBTX) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks LiveRamp Holdings, Inc. (NYSE:RAMP) is more popular among hedge funds. Our overall hedge fund sentiment score for RAMP is 80.8. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks returned 24% in 2021 through October 22nd but still managed to beat the market by 1.6 percentage points. Hedge funds were also right about betting on RAMP as the stock returned 10.4% since the end of June (through 10/22) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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Disclosure: None. This article was originally published at Insider Monkey.

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