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.
Big Lots, Inc. (NYSE:BIG) shares didn’t see a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 26 hedge funds’ portfolios at the end of the third quarter of 2016. At the end of this article we will also compare BIG to other stocks including Cathay General Bancorp (NASDAQ:CATY), Media General, Inc. (NYSE:MEG), and J&J Snack Foods Corp. (NASDAQ:JJSF) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
What does the smart money think about Big Lots, Inc. (NYSE:BIG)?
At Q3’s end, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, unchanged from the previous quarter, after a nice boost in ownership of the stock during Q2. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, AQR Capital Management, managed by Cliff Asness, holds the largest position in Big Lots, Inc. (NYSE:BIG). According to regulatory filings, the fund has a $65.8 million position in the stock. Sitting at the No. 2 spot is Steve Cohen of Point72 Asset Management, with a $20 million position. Some other professional money managers that are bullish comprise Joel Greenblatt’s Gotham Asset Management, Dmitry Balyasny’s Balyasny Asset Management, and Jim Simons’ Renaissance Technologies.