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.
Hedge fund interest towards Sigma Designs Inc (NASDAQ:SIGM) shares was flat at the end of last quarter. This is usually a negative indicator. 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 Atlantic Power Corp (NYSE:AT), Farmers National Banc Corp (NASDAQ:FMNB), and The Chefs Warehouse, Inc (NASDAQ:CHEF) 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.
Keeping this in mind, let’s view the latest action surrounding Sigma Designs Inc (NASDAQ:SIGM).
How have hedgies been trading Sigma Designs Inc (NASDAQ:SIGM)?
At the end of September, a total of 16 of the hedge funds tracked by Insider Monkey were long Sigma Designs, unchanged over the quarter. There were also 16 funds with a bullish position in SIGM at the beginning of 2016. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Chuck Royce’s Royce & Associates has the biggest position in Sigma Designs Inc (NASDAQ:SIGM), worth close to $14 million, amounting to 0.1% of its total 13F portfolio. The second most bullish fund manager is Renaissance Technologies, one of the largest hedge funds in the world, holding a $13.4 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other peers with similar optimism contain George Soros’ Soros Fund Management, Israel Englander’s Millennium Management, and Ken Fisher’s Fisher Asset Management. We should note that Soros Fund Management is 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.