Do Hedge Funds Love J Alexander’s Holdings Inc (JAX)?

Reputable billionaire investors such as Nelson Peltz and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won’t accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.

J Alexander’s Holdings Inc (NYSE:JAX) investors should be aware of an increase in activity from the world’s largest hedge funds of late as there were 18 hedge funds that were long the stock at the end of the third quarter versus none at the end of the second quarter (JAX recently did its initial public offering in September). 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 Harmony Merger Corp (NASDAQ:HRMNU), Resource America Inc (NASDAQ:REXI), and EVINE Live Inc (NASDAQ:EVLV) to gather more data points.

Keeping this in mind, we’re going to take a gander at the latest action regarding J Alexander’s Holdings Inc (NYSE:JAX).

Hedge fund activity in J Alexander’s Holdings Inc (NYSE:JAX)

According to Insider Monkey’s hedge fund database, Ricky Sandler’s Eminence Capital has the most valuable position in J Alexander’s Holdings Inc (NYSE:JAX), worth close to $12.4 million, accounting for 0.2% of its total 13F portfolio. The second most bullish fund manager is Highfields Capital Management, managed by Jonathon Jacobson, which holds a $7.6 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish comprise Leon Lowenstein’s Lionstone Capital Management, D E Shaw and James Dondero’s Highland Capital Management.

With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. Eminence Capital, managed by Ricky Sandler, initiated the biggest position in J Alexander’s Holdings Inc (NYSE:JAX). Eminence Capital had $12.4 million invested in the company at the end of the quarter. Jonathon Jacobson’s Highfields Capital Management also made a $7.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Leon Lowenstein’s Lionstone Capital Management, D E Shaw, and James Dondero’s Highland Capital Management.

Let’s now take a look at hedge fund activity in other stocks similar to J Alexander’s Holdings Inc (NYSE:JAX). These stocks are Harmony Merger Corp (NASDAQ:HRMNU), Resource America Inc (NASDAQ:REXI), EVINE Live Inc (NASDAQ:EVLV), and Perion Network Ltd (NASDAQ:PERI). This group of stocks’ market values match JAX’s market value.

As you can see these stocks had an average of 8.75 hedge funds with bullish positions and the average amount invested in these stocks was $22 million. That figure was $32 million in JAX’s case. EVINE Live Inc (NASDAQ:EVLV) is the most popular stock in this table. On the other hand Harmony Merger Corp (NASDAQ:HRMNU) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks J Alexander’s Holdings Inc (NYSE:JAX) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.