You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.
In this article, we’ll take a closer look at Cresud S.A.C.I.F. y A. (ADR) (NASDAQ:CRESY), which registered a slight decline in popularity among smart money investors in our database. However, 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 LGI Homes Inc (NASDAQ:LGIH), Orthofix International NV (NASDAQ:OFIX), and PHH Corporation (NYSE:PHH) to gather more data points.
Follow Cresud Sociedad Anonima Comercial Inmobiliaria Financiera Y Agropecuaria (NASDAQ:CRESY)
Follow Cresud Sociedad Anonima Comercial Inmobiliaria Financiera Y Agropecuaria (NASDAQ:CRESY)
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. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.
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Keeping this in mind, let’s take a peek at the recent action surrounding Cresud S.A.C.I.F. y A. (ADR) (NASDAQ:CRESY).
What have hedge funds been doing with Cresud S.A.C.I.F. y A. (ADR) (NASDAQ:CRESY)?
Heading into the fourth quarter of 2016, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, versus 11 funds at the end of June. By comparison, nine hedge funds held shares or bullish call options in CRESY heading into this year. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Richard Mashaal’s Rima Senvest Management has the largest position in Cresud S.A.C.I.F. y A. (ADR) (NASDAQ:CRESY), worth close to $32.2 million, accounting for 2.3% of its total 13F portfolio. Coming in second is Ari Zweiman’s 683 Capital Partners, with a $19.8 million position; 2.1% of its 13F portfolio is allocated to the stock. Remaining members of the smart money that hold long positions comprise Mark T. Gallogly’s Centerbridge Partners, Herb Wagner’s FinePoint Capital, and Jody LaNasa’s Serengeti Asset Management. We should note that 683 Capital Partners 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.
We already know that not all hedge funds are bullish on the stock and some hedge funds actually said goodbye to their positions entirely. It’s worth mentioning that Renaissance Technologies, one of the largest hedge funds in the world said goodbye to the largest position of all the hedgies tracked by Insider Monkey, worth about $1.7 million in stock. Murray Stahl’s fund, Horizon Asset Management, also dropped its stock, about $0.2 million worth.
Let’s now review hedge fund activity in other stocks similar to Cresud S.A.C.I.F. y A. (ADR) (NASDAQ:CRESY). We will take a look at LGI Homes Inc (NASDAQ:LGIH), Orthofix International NV (NASDAQ:OFIX), PHH Corporation (NYSE:PHH), and Re/Max Holdings Inc (NYSE:RMAX). This group of stocks’ market caps resemble CRESY’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LGIH | 10 | 54893 | 0 |
| OFIX | 23 | 231332 | 3 |
| PHH | 20 | 271332 | 3 |
| RMAX | 4 | 25202 | -2 |
As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $146 million, versus $86 million in CRESY’s case. Orthofix International NV (NASDAQ:OFIX) is the most popular stock in this table with 23 funds holding shares. On the other hand Re/Max Holdings Inc (NYSE:RMAX) is the least popular one with only four bullish hedge fund positions. Cresud S.A.C.I.F. y A. (ADR) (NASDAQ:CRESY) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard Orthofix International NV (NASDAQ:OFIX) might be a better candidate to consider taking a long position in.
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