By: Manisha Sethi Aug. 15, 2018
Herald Investment Management Ltd.’s SEC 13F filings on May 14, 2018, confirmed the firm’s portfolio value at $334.80 million, of which 42.32% was contributed by the top 10 holdings. Pegasystems, Inc. (PEGA) and Silicon Motion Technology Corp. (SIMO) account for 5.95% and 5.50% of the portfolio value. The firm has invested in varied sectors; however, technology stocks make up largest share of 85.52%. Herald Investment Management Limited was founded in December 1993 and is based in London, United Kingdom. The firm invests in the public equity and alternative investments markets across the globe. It typically invests in companies operating in the technology, media, and communications industries. Its portfolio selections are based on its fundamental research analysis.
According to a study conducted by Raltin, 60 of its 103 (58.25%) stock purchases between Q1 2014 and Q1 2018 have outperformed the S&P 500. In fact, 32 of these have beat the index by more than 20%. About 24.27% or 25 new stock purchases ) have underperformed the S&P 500 by more than 20%. A detailed description of Raltin’s methodology can be found here. The following table lists the various categories of new purchases relative to their performance against the S&P 500.
|S&P outperformance category||Number of new stock purchases||Total new purchases (%)|
|-10 to 0%||10||9.71|
|-20 to -10%||8||7.77|
In the recent quarter, Herald Investment Management bought 9 new stocks from IT, energy, and the consumer discretionary sectors. The table below shows the new purchases, the number of shares per stock, and their holding value.
|Stocks||Number of shares||Holding value ($1,000)|
|Super Micro Computer, Inc. (SMCI)||186,000||3,152|
|RADCOM Ltd. (RDCM)||161,000||2,954|
|Fitbit Inc. (FIT)||375,000||1,912|
|Harmonic, Inc. (HLIT)||500,000||1,900|
|ChipMOS TECHNOLOGIES INC / (16965P103)||98,227||1,554|
|Ballard Power Systems, Inc. (BLDP)||316,000||1,121|
|One Stop Systems, Inc. (OSS)||180,000||792|
|Ciena Corp. (CIEN)||22,500||582|
|SITO Mobile, Ltd. (SITO)||125,000||502|
The following table presents the investor’s portfolio value for five quarters starting from Q1 2017 to Q1 2016 and the top holdings in each quarter that outperformed S&P 500. It is evident that Hortonworks, Inc. (HDP), Atlassian Corporation Plc (TEAM), Asure Software, Inc. (ASUR), Kornit Digital Ltd. (KRNT) and others have successfully defeated the index.
|Period||Total portfolio value ($Mn)||Top holdings (ticker, % of IRR difference from S&P 500)|
|Q1 2017||273.654||Hortonworks, Inc. (HDP, 96.4), AXT, Inc. (AXTI, 13.42), Tower Semiconductor Ltd. (TSEM, 5.13)|
|Q4 2016||231.242||Atlassian Corporation Plc (TEAM, 69.92), Asure Software, Inc. (ASUR, 46.71), SS&C Technologies Holdings, Inc. (SSNC, 22.23)|
|Q3 2016||269.705||Alibaba Group Holding Limited (BABA, 47.28), Kornit Digital Ltd. (KRNT, 47.14), Varonis Systems, Inc. (VRNS, 23.13)|
|Q1 2016||235.088||RingCentral, Inc. (RNG, 64.98)|