Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
One stock that saw an increase in enthusiasm from smart money last quarter is 8×8, Inc. (NASDAQ:EGHT). Overall, the number of funds long the stock went up to 20 from 17. However, the level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Gigamon Inc (NYSE:GIMO), TeleTech Holdings, Inc. (NASDAQ:TTEC), and Rovi Corporation (NASDAQ:ROVI) to gather more data points.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
Now, we’re going to take a peek at the new action regarding 8×8, Inc. (NASDAQ:EGHT).
How have hedgies been trading 8×8, Inc. (NASDAQ:EGHT)?
Heading into the fourth quarter, a total of 20 investors tracked by Insider Monkey were bullish on 8×8, Inc. (NASDAQ:EGHT), up by 18% from the end of June. The graph below displays the number of hedge funds with bullish position in EGHT over the last five quarters. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Polar Capital, led by Brian Ashford-Russell and Tim Woolley, holds the largest position in 8×8, Inc. (NASDAQ:EGHT). Polar Capital has a $35 million position in the stock, comprising 0.6% of its 13F portfolio. Coming in second is Jim Simons’ Renaissance Technologies, with a $30 million position; 0.1% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors that are bullish comprise Principal Global Investors’s Columbus Circle Investors, Peter Rathjens, Bruce Clarke and Richard Driehaus’ Driehaus Capital. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.