Is Extreme Networks, Inc (EXTR) A Better Stock Than Its Peers?

The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge funds have been producing disappointing net returns in recent years, however that was partly due to the poor performance of small-cap stocks in general. Well, small-cap stocks finally turned the corner and have been beating the large-cap stocks by more than 10 percentage points over the last 5 months.This means the relevancy of hedge funds’ public filings became inarguable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Extreme Networks, Inc (NASDAQ:EXTR) .

Extreme Networks, Inc (NASDAQ:EXTR) shareholders have witnessed an increase in hedge fund interest lately. EXTR was in 20 hedge funds’ portfolios at the end of September. There were 16 hedge funds in our database with EXTR 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 Alpine Global Premier Properties Fund (NYSE:AWP), Carrols Restaurant Group, Inc. (NASDAQ:TAST), and Anworth Mortgage Asset Corporation (NYSE:ANH) to gather more data points.

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.

Now, we’re going to check out the key action surrounding Extreme Networks, Inc (NASDAQ:EXTR).

What does the smart money think about Extreme Networks, Inc (NASDAQ:EXTR)?

At the end of the third quarter, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 25% from the second quarter of 2016. The graph below displays the number of hedge funds with bullish position in EXTR 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, Jim Simons’s Renaissance Technologies has the most valuable position in Extreme Networks, Inc (NASDAQ:EXTR), worth close to $20.9 million, amounting to less than 0.1%% of its total 13F portfolio. The second largest stake is held by Arbiter Partners Capital Management, led by Paul J. Isaac, holding a $16.5 million position; 2% of its 13F portfolio is allocated to the stock. Remaining members of the smart money that hold long positions comprise Chuck Royce’s Royce & Associates, Israel Englander’s Millennium Management and George Soros’s Soros Fund Management. We should note that two of these hedge funds (Arbiter Partners Capital Management and Soros Fund Management) 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.

Now, specific money managers were breaking ground themselves. Soros Fund Management assembled the most valuable position in Extreme Networks, Inc (NASDAQ:EXTR). Soros Fund Management had $4.8 million invested in the company at the end of the quarter. Neil Chriss’s Hutchin Hill Capital also made a $0.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Robert B. Gillam’s McKinley Capital Management, Wojciech Uzdelewicz’s Espalier Global Management, and Mike Vranos’s Ellington.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Extreme Networks, Inc (NASDAQ:EXTR) but similarly valued. These stocks are Alpine Global Premier Properties Fund (NYSE:AWP), Carrols Restaurant Group, Inc. (NASDAQ:TAST), Anworth Mortgage Asset Corporation (NYSE:ANH), and The Hackett Group, Inc. (NASDAQ:HCKT). This group of stocks’ market caps resemble EXTR’s market cap.

As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $44 million. That figure was $73 million in EXTR’s case. Carrols Restaurant Group, Inc. (NASDAQ:TAST) is the most popular stock in this table. On the other hand Alpine Global Premier Properties Fund (NYSE:AWP) is the least popular one with only 4 bullish hedge fund positions. Extreme Networks, Inc (NASDAQ:EXTR) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard TAST might be a better candidate to consider taking a long position in.