Hedge Funds Are Buying Vince Holding Corp (VNCE)

Before putting in our own effort and resources into finding a good investment, we can quickly utilize hedge fund expertise to give us a quick glimpse of whether that stock could make for a good addition to our portfolios. The odds are not exactly stacked in investors’ favor when it comes to beating the market, as evidenced by the fact that less than 49% of the stocks in the S&P 500 did so during the 12-month period ending October 30. However, 63% of hedge funds’ top 30 stock picks from the index did beat the market, and returned nearly twice as much on average as the index. Thus, we can see that the tireless research and efforts of hedge funds to identify winning stocks can work to our advantage when we know how to use the data. While not all of their picks will be winners, our odds are much better following their best stock picks than trying to go it alone.

Is Vince Holding Corp (NYSE:VNCE) a buy right now? The smart money is getting more bullish. The number of bullish hedge fund positions improved by 1 lately. VNCE was in 18 hedge funds’ portfolios at the end of the third quarter of 2015. There were 17 hedge funds in our database with VNCE positions at the end of the previous quarter. At the end of this article we will also compare VNCE to other stocks, including Liberator Medical Holdings Inc (NYSEMKT:LBMH), Wheeler Real Estate Investment Trust Inc (NASDAQ:WHLR), and Zynerba Pharmaceuticals Inc (NASDAQ:ZYNE) to get a better sense of its popularity.

According to most market participants, hedge funds are viewed as underperforming, old investment tools of yesteryear. While there are greater than 8000 funds with their doors open at present, Our researchers look at the masters of this club, about 700 funds. These investment experts oversee the lion’s share of the smart money’s total asset base, and by observing their best investments, Insider Monkey has figured out numerous investment strategies that have historically exceeded the market. Insider Monkey’s small-cap hedge fund strategy outrun the S&P 500 index by 12 percentage points a year for a decade in their back tests.

With all of this in mind, let’s take a peek at the recent action surrounding Vince Holding Corp (NYSE:VNCE).

Hedge fund activity in Vince Holding Corp (NYSE:VNCE)

Heading into Q4, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 6% from the second quarter. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were upping their stakes significantly (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Steven Boyd’s Armistice Capital has the number one position in Vince Holding Corp (NYSE:VNCE), worth close to $5.3 million, amounting to 1.8% of its total 13F portfolio. On Armistice Capital’s heels is Phill Gross and Robert Atchinson’s Adage Capital Management, with a $2.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that hold long positions encompass Jim Simons’ Renaissance Technologies, John Overdeck and David Siegel’s Two Sigma Advisors and Ken Griffin’s Citadel Investment Group.

As industrywide interest jumped, specific money managers were leading the bulls’ herd. Armistice Capital assembled the biggest position in Vince Holding Corp (NYSE:VNCE). Adage Capital Management also initiated its position during the quarter. The other funds with brand new VNCE positions are Michael R. Weisberg’s Crestwood Capital Management, Cliff Asness’ AQR Capital Management, and Adam Wright and Gary Kohler’s Blue Clay Capital.

Let’s now review hedge fund activity in other stocks similar to Vince Holding Corp (NYSE:VNCE). These stocks are Liberator Medical Holdings Inc (NYSEMKT:LBMH), Wheeler Real Estate Investment Trust Inc (NASDAQ:WHLR), Zynerba Pharmaceuticals Inc (NASDAQ:ZYNE), and Northwest Pipe Company (NASDAQ:NWPX). This group of stocks’ market values resemble VNCE’s market value.

As you can see these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $21 million. That figure was $19 million in VNCE’s case. Northwest Pipe Company (NASDAQ:NWPX) is the most popular stock in this table, while Zynerba Pharmaceuticals Inc (NASDAQ:ZYNE) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Vince Holding Corp (NYSE:VNCE) 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.