Amid an overall market correction, many stocks that smart money investors were collectively bullish on tanked during the third quarter. Among them, Valeant and Micron ranked among the top 30 picks and both lost around 20%. Citigroup, which was the third most popular stock, lost 10% amid uncertainty regarding the interest rates. Nevertheless, our research shows that most of the stocks that smart money likes historically generate strong risk-adjusted returns. This is why following the smart money sentiment is a useful tool at identifying the next stock to invest in.
China XD Plastics Co Ltd (NASDAQ:CXDC) investors should be aware of an increase in support from the world’s most elite money managers of late. China XD Plastics Co Ltd (NASDAQ:CXDC) was in 4 hedge funds’ portfolios at the end of September. There were 3 hedge funds in our database with China XD Plastics Co Ltd (NASDAQ:CXDC) holdings at the end of the previous quarter. At the end of this article, we will also compare China XD Plastics Co Ltd (NASDAQ:CXDC) to other stocks, including Enzymotec Ltd (NASDAQ:ENZY), Bonanza Creek Energy Inc (NYSE:BCEI), and Xerium Technologies, Inc. (NYSE:XRM) to get a better sense of its popularity.
To most investors, hedge funds are assumed to be worthless, old investment tools of the past. While there are more than 8000 funds in operation at the moment, We choose to focus on the top tier of this group, around 700 funds. Most estimates calculate that this group of people oversee the lion’s share of all hedge funds’ total capital, and by observing their matchless picks, Insider Monkey has brought to light a few investment strategies that have historically outrun the broader indices. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 12 percentage points per year for a decade in their back tests.
With all of this in mind, let’s take a look at the new action regarding China XD Plastics Co Ltd (NASDAQ:CXDC).
Hedge fund activity in China XD Plastics Co Ltd (NASDAQ:CXDC)
Heading into Q4, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 33% from the second quarter. With the smart money’s capital changing hands, there exists a select group of notable 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, Glenhill Advisors, managed by Glenn J. Krevlin, holds the most valuable position in China XD Plastics Co Ltd (NASDAQ:CXDC). Glenhill Advisors has a $10.2 million position in the stock, comprising 0.8% of its 13F portfolio. The second largest stake is held by Renaissance Technologies, which holds a $2.4 million position; less than 0.1% of its 13F portfolio is allocated to the stock. Other members of the smart money that hold long positions consist of Dmitry Balyasny’s Balyasny Asset Management, and Ken Griffin’s Citadel Investment Group.