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Is FutureFuel Corp. (FF) Worthy of Your Portfolio?

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Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.

In this article, we are going to take a closer look at what smart money investors from our database think about FutureFuel Corp. (NYSE:FF). Overall, the hedge fund interest towards the stock was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare FF to other stocks including Hortonworks Inc (NASDAQ:HDP), Editas Medicine Inc (NASDAQ:EDIT), and Live Oak Bancshares Inc (NASDAQ:LOB) to get a better sense of its popularity.

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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.

Macquarie Infrastructure MIC pipeline oil, petroleum, gas, oil and gas, fuel, sunlight, petrochemical

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With all of this in mind, let’s analyze the latest action encompassing FutureFuel Corp. (NYSE:FF).

What have hedge funds been doing with FutureFuel Corp. (NYSE:FF)?

Heading into the fourth quarter of 2016, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in FutureFuel Corp. (NYSE:FF), unchanged over the quarter. On the other hand, there were a total of 14 hedge funds with a bullish position in FF at the beginning of this year. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

HedgeFundSentimentChart (74)

Of the funds tracked by Insider Monkey, Renaissance Technologies, one of the largest hedge funds in the world, holds the most valuable position in FutureFuel Corp. (NYSE:FF). Renaissance Technologies has a $16.2 million position in the stock, comprising less than 0.1% of its 13F portfolio. Coming in second is Chuck Royce’s Royce & Associates, with a $14.4 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors that are bullish include Cliff Asness’ AQR Capital Management, John W. Rogers’ Ariel Investments, and John Overdeck and David Siegel’s Two Sigma Advisors. 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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