Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is the small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we follow the hedge fund activity in the small-cap space.
Is AVX Corporation (NYSE:AVX) an outstanding investment today? Investors who are in the know are taking a bullish view. The number of bullish hedge fund positions that are disclosed in regulatory 13F filings experienced an increase of 3 lately. AVXwas in 17 hedge funds’ portfolios at the end of the third quarter of 2016. There were 14 hedge funds in our database with AVX 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 Mentor Graphics Corp (NASDAQ:MENT), Franks International NV (NYSE:FI), and National General Holdings Corp (NASDAQ:NGHC) 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.
Keeping this in mind, we’re going to view the new action regarding AVX Corporation (NYSE:AVX).
What have hedge funds been doing with AVX Corporation (NYSE:AVX)?
At the end of the third quarter, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 21% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in AVX over the last 5 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Chuck Royce’s Royce & Associates has the biggest position in AVX Corporation (NYSE:AVX), worth close to $124.7 million, accounting for 0.8% of its total 13F portfolio. On Royce & Associates’s heels is Sensato Capital Management, led by Ernest Chow and Jonathan Howe, holding a $12.3 million position; the fund has 2.6% of its 13F portfolio invested in the stock. Remaining peers that hold long positions consist of Jim Simons’s Renaissance Technologies, Israel Englander’s Millennium Management and Ken Griffin’s Citadel Investment Group. We should note that Sensato Capital Management is 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.