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.
Nimble Storage Inc (NYSE:NMBL) has seen an increase in enthusiasm from smart money lately, with a net total of 5 more hedgies owning the stock in Q3. 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 New York Mortgage Trust, Inc. (NASDAQ:NYMT), The Providence Service Corporation (NASDAQ:PRSC), and Calgon Carbon Corporation (NYSE:CCC) 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.
How are hedge funds trading Nimble Storage Inc (NYSE:NMBL)?
At the end of the third quarter, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a 36% surge from the second quarter of 2016. That followed a 2-quarter downturn in ownership of the stock. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Brett Barakett’s Tremblant Capital has the number one position in Nimble Storage Inc (NYSE:NMBL), worth close to $48.1 million, amounting to 2.7% of its total 13F portfolio. The second largest stake is held by Renaissance Technologies, managed by Jim Simons, which holds a $40.4 million position. Other hedge funds and institutional investors that are bullish consist of Brian Ashford-Russell and Tim Woolley’s Polar Capital, Ken Hahn’s Quentec Asset Management and Ken Griffin’s Citadel Investment Group.