SMH Capital Advisors' Q4 2022 13F filing: analysis of top holdings and changes.

Institutional investors have a significant influence on the stock market as they control billions of dollars worth of assets. SMH Capital Advisors, Inc. is one such institutional investor that filed its latest 13F SEC filing for Q4 2022. The 13F is filed quarterly by institutional investors with more than $100 million in assets under management (AUM) and reports their holdings and changes. The filing can give investors insights into an institutional investor's portfolio adjustments and market sentiment. In this article, we'll analyze the key changes in SMH Capital Advisors' portfolio and delve into the possible reasons behind them.

Top Stocks Holding in Q4 2022

SMH Capital Advisors' top holdings in terms of value in the 13F filing for Q4 2022 were:

- "Hello Group Inc."

- "NIO Inc."

- "WisdomTree Inc."

- "DigitalBridge Group Inc."

- "FuboTV Inc."

The top holdings in the fund's portfolio were largely unchanged from Q3 2022. Only "WisdomTree Inc." saw a reduction in the number of shares held by the fund. SMH Capital Advisors reduced its holding by 8.5% from 10.4 million shares in Q3 to 9.5 million shares in Q4. The reason for the reduction in the position is unclear.

Increase in Holdings

Looking at the top stocks with an increase in holdings, Apollo Global Management, Inc. (APO) tops the list with a 37.2% increase in shares, from 14,490 shares in Q3 to 14,494 shares in Q4. Apollo is one of the largest alternative asset managers globally and is known for private equity, credit, and real estate investments. One potential reason for SMH Capital Advisors' increased holding in Apollo could be the company's recent announcement of converting to a corporation from a partnership. The move opens doors for larger institutional investors interested in investing in the company.

Another stock with a substantial increase in holdings is JP Morgan Chase & Co (JPM), for which SMH Capital Advisors obtained a new position in Q4, buying 1,572 shares of the bank. JPMorgan Chase & Co. is one of the largest financial services firms in the world and offers a wide range of services, from investment banking to retail banking. JP Morgan's stock has a good dividend yield and solid fundamentals backed by the company's strong earnings outlook. SMH Capital Advisors' investment in JPM could indicate an increase in confidence in the banking sector.

Holdings Reduced

Several holdings saw reductions in shares held by SMH Capital Advisors. Among them, Prospec Capital Corp (PSEC) took the largest hit with a 15.7% reduction in shares from 115,110 shares in Q3 to 100,442 shares in Q4. Prospects Capital Corp is a business development company that provides capital to middle-market companies. The company has been facing serious headwinds with its investments in oil and gas production and retail stores, which could be a reason behind SMH Capital Advisors reducing its position in the company.

Quest Diagnostics Inc. (DGX) saw the second-largest reduction in holdings, with SMH cutting its position by 49.1% from 3,255 shares in Q3 to 1,659 shares in Q4. Quest Diagnostics is a provider of diagnostic insights aimed at improving patient outcomes.

SMH Capital Advisors' largest position reduction was in the stock of D.R. Horton, Inc. (DHI). The fund sold all its shares in the US's largest homebuilder in Q4, disposing of 10,575 shares worth $712,000. The reason behind the sudden disposal of shares remains unclear, and it's not known what other investment SMH Capital Advisors used the proceeds to acquire.

Conclusion

Overall, the SMH Capital Advisors' Q4 13F filing showed signs of confidence in the financial and private equity sectors. Financial service stocks were among the top holdings for the fund, with JP Morgan Chase & Co. being a new addition to the portfolio. The fund also increased its holding in private equity powerhouse Apollo Global Management. On the other hand, SMH Capital Advisors reduced its holdings in sectors with some short-term headwinds, such as business development companies and diagnostic companies. Companies with fundamentals that remain strong and have solid outlooks, such as Wal-Mart and Merck & Co Inc, continued to remain in SMH Capital Advisors' top holdings.

However, looking at these top holdings, the fund's allocation seems concentrated, and investors should consider diversification beyond individual stocks to mitigate risk. Nonetheless, SMH Capital Advisors' 13F filing can serve as a useful source of information for investors looking to align their investment strategies with those of reputed institutional investors.