We have been waiting for this for a year and finally the third quarter ended up showing a nice bump in the performance of small-cap stocks. Both the S&P 500 and Russell 2000 were up since the end of the second quarter, but small-cap stocks outperformed the large-cap stocks by double digits. This is important for hedge funds, which are big supporters of small-cap stocks, because their investors started pulling some of their capital out due to poor recent performance. It is very likely that equity hedge funds will deliver better risk adjusted returns in the second half of this year. In this article we are going to look at how this recent market trend affected the sentiment of hedge funds towards Benchmark Electronics, Inc. (NYSE:BHE), and what that likely means for the prospects of the company and its stock.
So, is Benchmark Electronics, Inc. (NYSE:BHE) a buy here? It looks like investors who are in the know are becoming hopeful. The number of bullish hedge fund investments inched up by one to 17 during the third quarter. At the end of this article we will also compare BHE to other stocks including Cato Corp (NYSE:CATO), Universal Electronics Inc (NASDAQ:UEIC), and Qualys Inc (NASDAQ:QLYS) to get a better sense of its popularity.
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With all of this in mind, let’s go over the latest action encompassing Benchmark Electronics, Inc. (NYSE:BHE).
Hedge fund activity in Benchmark Electronics, Inc. (NYSE:BHE)
At the end of the third quarter, a total of 17 of the hedge funds tracked by Insider Monkey were long Benchmark Electronics, up by 6% from the end of the previous quarter. Below, you can check out the change in hedge fund sentiment towards BHE over the last five quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Engaged Capital, led by Glenn W. Welling, holds the most valuable position in Benchmark Electronics, Inc. (NYSE:BHE). Engaged Capital has a $60.6 million position in the stock, comprising 22.1% of its 13F portfolio. On Engaged Capital’s heels is Chuck Royce’s Royce & Associates holding a $35.9 million position; 0.2% of its 13F portfolio is allocated to the company. Some other members of the smart money with similar optimism comprise Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Jim Simons’ Renaissance Technologies, and Cliff Asness’ AQR Capital Management. 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.