WidePoint Corporation (WYY): Are Hedge Funds Right About This Stock?

Reymerlyn Martin
·6 min read

Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 817 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds' 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about WidePoint Corporation (NYSE:WYY) in this article.

WidePoint Corporation (NYSE:WYY) shareholders have witnessed an increase in hedge fund interest in recent months. WidePoint Corporation (NYSE:WYY) was in 3 hedge funds' portfolios at the end of September. The all time high for this statistics is 6. There were 2 hedge funds in our database with WYY positions at the end of the second quarter. Our calculations also showed that WYY 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 financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Peter Rathjens Arrowstreet Capital 394
Peter Rathjens Arrowstreet Capital 394

Peter Rathjens of Arrowstreet Capital

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 we're going to analyze the latest hedge fund action regarding WidePoint Corporation (NYSE:WYY).

Hedge fund activity in WidePoint Corporation (NYSE:WYY)

At the end of September, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 50% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards WYY over the last 21 quarters. With hedgies' sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).

According to Insider Monkey's hedge fund database, Renaissance Technologies has the biggest position in WidePoint Corporation (NYSE:WYY), worth close to $1.7 million, comprising less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which holds a $0.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. In terms of the portfolio weights assigned to each position Renaissance Technologies allocated the biggest weight to WidePoint Corporation (NYSE:WYY), around 0.0017% of its 13F portfolio. Arrowstreet Capital is also relatively very bullish on the stock, setting aside 0.0001 percent of its 13F equity portfolio to WYY.

As one would reasonably expect, specific money managers were breaking ground themselves. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, initiated the most valuable position in WidePoint Corporation (NYSE:WYY). Arrowstreet Capital had $0.1 million invested in the company at the end of the quarter. Ken Griffin's Citadel Investment Group also initiated a $0 million position during the quarter.

Let's go over hedge fund activity in other stocks similar to WidePoint Corporation (NYSE:WYY). We will take a look at CSI Compressco LP (NASDAQ:CCLP), Ampco-Pittsburgh Corp. (NYSE:AP), Manhattan Bridge Capital, Inc (NASDAQ:LOAN), OpGen, Inc. (NASDAQ:OPGN), Ocugen, Inc. (NASDAQ:OCGN), Gridsum Holding Inc. (NASDAQ:GSUM), and Sensus Healthcare, Inc. (NASDAQ:SRTS). This group of stocks' market caps resemble WYY's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CCLP,2,952,0 AP,5,10752,2 LOAN,1,648,0 OPGN,1,38,0 OCGN,1,115,-2 GSUM,4,6227,1 SRTS,2,580,0 Average,2.3,2759,0.1 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 2.3 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $2 million in WYY's case. Ampco-Pittsburgh Corp. (NYSE:AP) is the most popular stock in this table. On the other hand Manhattan Bridge Capital, Inc (NASDAQ:LOAN) is the least popular one with only 1 bullish hedge fund positions. WidePoint Corporation (NYSE:WYY) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for WYY 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 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 WYY as the stock returned 33% 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.

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