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.
One stock that registered an increase in popularity among smart money investors last quarter is Himax Technologies, Inc. (ADR) (NASDAQ:HIMX). At the end of September, 26 funds from our database held shares of HIMX, compared to 24 funds at the end of June. At the end of this article we will also compare HIMX to other stocks including ADTRAN, Inc. (NASDAQ:ADTN), 1st Source Corporation (NASDAQ:SRCE), and Express, Inc. (NYSE:EXPR) to get a better sense of its popularity.
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.
Keeping this in mind, we’re going to take a look at the key action surrounding Himax Technologies, Inc. (ADR) (NASDAQ:HIMX).
What does the smart money think about Himax Technologies, Inc. (ADR) (NASDAQ:HIMX)?
A total of 26 funds tracked by Insider Monkey were long Himax Technologies, Inc. (ADR) (NASDAQ:HIMX) at the end of the third quarter, which represents a change of 8% from the previous quarter. On the other hand, there were a total of 17 hedge funds with a bullish position in HIMX at the beginning of this year. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, David Halpert’s Prince Street Capital Management holds the number one position in Himax Technologies, Inc. (ADR) (NASDAQ:HIMX). Prince Street Capital Management has a $49.4 million position in the stock, comprising 9.1% of its 13F portfolio. The second most bullish fund manager is David Goel and Paul Ferri’s Matrix Capital Management, which holds a $28.4 million position; 1.2% of its 13F portfolio is allocated to the company. Remaining professional money managers that are bullish comprise Ken Hahn’s Quentec Asset Management, Brian Ashford-Russell and Tim Woolley’s Polar Capital, and Alok Agrawal’s Bloom Tree Partners. 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.