We have been waiting for this for a year and finally the third quarter ended up showing a nice bump in the performance of small-cap stocks. Both the S&P 500 and Russell 2000 were up since the end of the second quarter, but small-cap stocks outperformed the large-cap stocks by double digits. This is important for hedge funds, which are big supporters of small-cap stocks, because their investors started pulling some of their capital out due to poor recent performance. It is very likely that equity hedge funds will deliver better risk adjusted returns in the second half of this year. In this article we are going to look at how this recent market trend affected the sentiment of hedge funds towards Instructure Inc (NYSE:INST), and what that likely means for the prospects of the company and its stock.
Instructure Inc (NYSE:INST) investors should be aware of an increase in support from the world’s most successful money managers lately. INST was in 9 hedge funds’ portfolios at the end of the third quarter of 2016. There were 5 hedge funds in our database with INST holdings at the end of the second 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 Albany Molecular Research, Inc. (NASDAQ:AMRI) and Anika Therapeutics, Inc. (NASDAQ:ANIK) 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.
What does the smart money think about Instructure Inc (NYSE:INST)?
Heading into the fourth quarter of 2016, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a jump of 80% from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards INST over the last 5 quarters, with all 9 bullish hedge fund positions having been added this year after the stock’s Q4 2015 IPO. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Richard Driehaus’ Driehaus Capital has the number one position in Instructure Inc (NYSE:INST), worth close to $11.4 million. The second most bullish fund manager is Renaissance Technologies, one of the largest hedge funds in the world, which holds a $5.8 million position. Remaining peers with similar optimism consist of Philip Hempleman’s Ardsley Partners, George McCabe’s Portolan Capital Management, 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-micro-cap stocks.