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Is CONN’S, Inc. (CONN) Going to Burn These Hedge Funds?

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The worries about the election and the ongoing uncertainty about the path of interest-rate increases have been keeping investors on the sidelines. Of course, most hedge funds and other asset managers have been underperforming main stock market indices since the middle of 2015. Interestingly though, smaller-cap stocks registered their best performance relative to the large-capitalization stocks since the end of the June quarter, suggesting that this may be the best time to take a cue from their stock picks. In fact, the Russell 2000 Index gained more than 15% since the beginning of the third quarter, while the Standard and Poor’s 500 benchmark returned less than 6%. This article will lay out and discuss the hedge fund and institutional investor sentiment towards CONN’S, Inc. (NASDAQ:CONN) .

Is CONN’S, Inc. (NASDAQ:CONN) going to take off soon? Hedge funds are unambiguously becoming hopeful. The number of bullish hedge fund positions that are disclosed in regulatory 13F filings experienced an increase of 7 recently. CONN was in 13 hedge funds’ portfolios at the end of September. There were 6 hedge funds in our database with CONN positions 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 Bridgepoint Education Inc (NYSE:BPI), Natural Health Trends Corp. (NASDAQ:NHTC), and Tuniu Corp (NASDAQ:TOUR) to gather more data points.

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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.

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What have hedge funds been doing with CONN’S, Inc. (NASDAQ:CONN)?

At Q3’s end, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, up buy 117% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CONN over the last 5 quarters. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).

HedgeFundSentimentChart (1)

Of the funds tracked by Insider Monkey, Anchorage Advisors, led by Kevin Michael Ulrich and Anthony Davis, holds the number one position in CONN’S, Inc. (NASDAQ:CONN). Anchorage Advisors has a $47 million position in the stock, comprising 4.8% of its 13F portfolio. Coming in second is Citadel Investment Group, led by Ken Griffin, holding a $7.1 million position. Other hedge funds and institutional investors that are bullish comprise Christian Leone’s Luxor Capital Group and Israel Englander’s Millennium 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.

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