Why One Fund Added 415,000 Shares of a Software Stock Down 26% This Past Year
Key Points
Connecticut-based Manatuck Hill Partners bought 415,000 shares of Zeta Global in the third quarter.
The value of the overall stake increased by about $9.5 million during the period.
The fund now holds 705,000 Zeta shares valued at $14 million, comprising about 4.6% of fund assets and making it the largest disclosed holding.
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On November 14, Connecticut-based Manatuck Hill Partners disclosed the acquisition of 415,000 additional shares of Zeta Global (NYSE:ZETA), increasing its overall position value by approximately $9.5 million.
What Happened
According to a filing with the Securities and Exchange Commission dated November 14, Manatuck Hill Partners increased its position in Zeta Global (NYSE:ZETA) by 415,000 shares over the prior quarter. The expanded stake brought the fund’s total Zeta Global holdings to 705,000 shares worth $14.0 million as of September 30.
What Else to Know
Zeta Global now accounts for 4.6% of Manatuck Hill Partners’ reportable 13F assets under management.
Top holdings after filing:
- NYSE: ZETA: $14 million (4.6% of AUM)
- NASDAQ: REAL: $13.6 million (4.6% of AUM)
- NYSE: IMAX: $11.1 million (3.8% of AUM)
- NASDAQ: OPRX: $9.7 million (3.3% of AUM)
- NYSE: HLF: $8.4 million (2.9% of AUM)
As of Friday, shares were priced at $19.05, down a steep 26% over the past year and well underperforming the S&P 500, which is up 13% in the same period.
Company Overview
| Metric | Value |
|---|---|
| Revenue (TTM) | $1.2 billion |
| Net income (TTM) | ($22.8 million) |
| Market capitalization | $4.7 billion |
| Price (as of market close Friday) | $19.05 |
Company Snapshot
- Zeta Global offers an omnichannel cloud-based marketing platform, including consumer intelligence, marketing automation, and customer data solutions.
- The company generates revenue through enterprise software subscriptions and data analytics services, leveraging machine learning and proprietary opted-in data sets.
- It serves large enterprises and organizations seeking advanced marketing, customer engagement, and data-driven decision-making capabilities.
Zeta Global operates at scale in the technology sector, providing data-driven marketing software and analytics to enterprise clients. The company differentiates itself through robust machine learning algorithms and a significant proprietary data set, enabling clients to predict consumer intent and optimize marketing strategies. With a focus on omnichannel engagement, Zeta Global is positioned to support organizations aiming to consolidate and leverage consumer data for competitive advantage.
Foolish Take
This move seems like a vote of confidence around Zeta’s ability to convert product momentum into durable financial performance — despite the stock’s sharp slide since last year’s peak. The company just delivered its 17th straight beat-and-raise quarter, posting 26% revenue growth to $337 million, expanding adjusted EBITDA margins, and generating $47 million in free cash flow, up 83% year over year. That consistency stands out in a volatile software environment and helps explain why an investor would add exposure at a time when sentiment toward adtech and martech names has cooled.
Manatuck Hill Partners’ larger position also fits its pattern of concentrating capital in mid-cap names with accelerating fundamentals. At 4.6% of reportable assets, Zeta now sits alongside the fund’s sizable stakes in The RealReal and IMAX, signaling conviction rather than opportunistic trading.
For long-term investors, Zeta’s improving cash generation, rising count of “super-scaled” customers, and 2026 guidance calling for another year of more than 20% revenue growth create a clearer path to sustained profitability. The risk is that the stock remains highly sentiment-driven, but the fundamentals now offer a stronger floor than a year ago.
Glossary
13F reportable assets: Securities that institutional investment managers must disclose quarterly to the Securities and Exchange Commission (SEC) using Form 13F.
Assets under management (AUM): The total market value of investments managed by a fund or investment firm.
Omnichannel: Integrating multiple communication and sales channels to provide a seamless customer experience.
Machine learning: A type of artificial intelligence where computer systems learn from data to improve performance without explicit programming.
Proprietary data set: Unique data owned and controlled by a company, not available to competitors.
Enterprise software subscriptions: Ongoing payments by businesses for access to large-scale software solutions.
Data analytics services: Services that analyze data to extract insights and support decision-making.
Trailing one-year return: The investment return over the past 12 months, ending at the most recent date.
Quarter: A three-month period used by companies for financial reporting and performance measurement.
TTM: The 12-month period ending with the most recent quarterly report.
Market close: The end of the regular trading session for a stock exchange on a given day.
Opted-in data: Information collected from users who have given explicit permission for its use.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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