Hedge Funds Are Buying HFF, Inc. (HF)

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.

HFF, Inc. (NYSE:HF) investors should be aware of an increase in hedge fund sentiment recently. At the end of this article we will also compare HF to other stocks, including United Community Banks Inc (NASDAQ:UCBI), Global Blood Therapeutics Inc (NASDAQ:GBT), and Multi-Color Corporation (NASDAQ:LABL) to get a better sense of its popularity.

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Now, we’re going to review the key action surrounding HFF, Inc. (NYSE:HF).

How have hedgies been trading HFF, Inc. (NYSE:HF)?

At the end of the third quarter, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 20% from the previous quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Jim Simons’ Renaissance Technologies has the number one position in HFF, Inc. (NYSE:HF), worth close to $22.5 million, comprising 0.1% of its total 13F portfolio. The second largest stake is held by Anand Parekh’s Alyeska Investment Group, with a $18.6 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other peers that hold long positions contain John Brennan’s Sirios Capital Management, Douglas Dunn and Vincent Soler’s Limestone Value Partners and Israel Englander’s Millennium Management.

Consequently, specific money managers have jumped into HFF, Inc. (NYSE:HF) headfirst. Millennium Management initiated the biggest position in HFF, Inc. (NYSE:HF). Millennium Management had $5.4 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also made a $2.1 million investment in the stock during the quarter. The other funds with new positions in the stock are Mike Vranos’s Ellington, Joel Greenblatt’s Gotham Asset Management, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Let’s go over hedge fund activity in other stocks similar to HFF, Inc. (NYSE:HF). We will take a look at United Community Banks Inc (NASDAQ:UCBI), Global Blood Therapeutics Inc (NASDAQ:GBT), Multi-Color Corporation (NASDAQ:LABL), and M.D.C. Holdings, Inc. (NYSE:MDC). This group of stocks’ market caps resemble HF’s market cap.

As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $147 million. That figure was $77 million in HF’s case. United Community Banks Inc (NASDAQ:UCBI) is the most popular stock in this table with 15 funds holding shares of the company. On the other hand M.D.C. Holdings, Inc. (NYSE:MDC) is the least popular one. Compared to these stocks, HFF, Inc. (NYSE:HF) 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.