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Elite Hedge Funds’ Bullish Moves On These Four Stocks

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The latest round of 13F filings kicked off at the beginning of October, but as these public filings are only required to be filed within 45 days of the end of each calendar quarter, one might find their content less informative (although our research has shown this is not the case). However, 13D and 13G filings do contain more up-to-date information on hedge funds’ strong stances on different companies, which essentially represents one of the main reasons the Insider Monkey team tracks and reports on the filings of the most prominent hedge fund investors. With this in mind, this article will discuss four such moves made by several reputable hedge funds monitored by our team.

Ricky Sandler

We don’t just track the latest moves of hedge funds. We are, in fact, more interested in their 13F filings, which we use to determine the top 15 small-cap stocks held by the funds we track. We gather and share this information based on 16 years of research which showed that these 15 most popular small-cap picks have a great potential to outperform the market, beating the S&P 500 Total Return Index by nearly one percentage point per month in backtests, and easily beating the most popular large-cap picks of funds, which nonetheless get the majority of their collective capital. Why pay fees to invest in both the best and worst ideas of a particular hedge fund when you can simply mimic only the very best ideas of the best fund managers on your own? Since the beginning of forward testing in August 2012, the Insider Monkey small-cap strategy has outperformed the market every year, returning 102%, nearly 2.1 times greater returns than the S&P 500 during the same period (see more details).

In a Schedule 13D filing with the SEC, Gifford CombsDalton Investments LLC disclosed an ownership stake of 2.00 million shares in Eros International plc (NYSE:EROS), which accounts for 6.3% of the company’s outstanding common stock. This denotes an increase of 1.14 million shares from the position it disclosed during the latest round of 13F filings, for the reporting period of September 30. The public filing also disclosed that Dalton Investments poured money into the company’s stock with the belief that it was undervalued, considering its “market position as a leading company in the Indian film entertainment industry”. The Santa Monica-based investment firm also intends to discuss with different parties regarding Eros International plc (NYSE:EROS)’s corporate governance, board composition, operations, and business, among other things.

The shares of the company have been in a slide since mid-October, when an unknown Twitter user started Tweeting about Eros, claiming that the company’s United Arab Emirates sales were not valid and doubting the number of the company’s ErosNow registered users (read more details). The stock is down by 35% year-to-date and Dalton Investment is attempting to generate profits from this outcome. Charles Davidson’s Wexford Capital owns 96,789 shares of Eros International plc (NYSE:EROS) as of September 30.

Gifford Combs
Gifford Combs
Dalton Investments

According to a freshly-submitted 13G filing, Stephen DuBois’s Camber Capital Management LLC added a 2 million-share position in Cardiovascular Systems Inc. (NASDAQ:CSII) to its portfolio, representing 6.16% of the company’s shares. The medical device company that focuses on developing innovative solutions for the treatment of vascular and coronary disease is set to disclose its fiscal year 2016 first quarter financial results and financial outlook after the market close tomorrow, which will surely shed some light on the company’s developments and its future course. In the meantime, Cardiovascular Systems Inc. (NASDAQ:CSII)’s stock is 53% in the red year-to-date.

Stephen Dubois
Stephen Dubois
Camber Capital Management

Even so, the stock gained some popularity among the hedge funds tracked by Insider Monkey during the second quarter, with the number of money managers bullish on the stock increasing to 20 from 14 quarter-over-quarter. However, the value of their investments decreased to $117.28 million from $138.56 million over this time span. These hedge funds had stockpiled 14% of the company’s shares as of June 30.  Mitchell Blutt’s Consonance Capital Management held a 2.48 million-share stake in Cardiovascular Systems Inc. (NASDAQ:CSII) at the end of June.

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Let’s head to the next page, where we discuss the freshly-made moves of Eminence Capital and OZ Management.

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