You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.
Is Esperion Therapeutics Inc (NASDAQ:ESPR) going to take off soon? The smart money is genuinely in an optimistic mood. The number of long hedge fund bets increased by 6 in recent months. ESPR was in 12 hedge funds’ portfolios at the end of the third quarter of 2016. There were 6 hedge funds in our database with ESPR holdings at the end of the previous quarter. 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 RAIT Financial Trust (NYSE:RAS), Straight Path Communications Inc (NYSEMKT:STRP), and Primero Mining Corp (NYSE:PPP) to gather more data points.
We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.
Hedge fund activity in Esperion Therapeutics Inc (NASDAQ:ESPR)
At Q3’s end, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 100% surge from one quarter earlier. The graph below displays the number of hedge funds with bullish positions in ESPR over the last 5 quarters, which declined markedly before the Q3 rebound. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Dennis Purcell’s Aisling Capital has the most valuable position in Esperion Therapeutics Inc (NASDAQ:ESPR), worth close to $22.7 million, amounting to 4.7% of its total 13F portfolio. Coming in second is Matthew Halbower of Pentwater Capital Management, with a $21.3 million position. Remaining professional money managers that hold long positions comprise Rob Citrone’s Discovery Capital Management, Mark Lampert’s Biotechnology Value Fund, and Renaissance Technologies, one of the largest hedge funds in the world. 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.