Is Steiner Leisure Ltd (NASDAQ:STNR) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before doing days of research on it. Given their 2-and-20 payment structure, hedge funds have more resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also have numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Is Steiner Leisure Ltd (NASDAQ:STNR) a bargain? Hedge funds are becoming more confident. The number of bullish hedge fund bets improved by 4 recently. 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 Chesapeake Utilities Corporation (NYSE:CPK), National Western Life Insurance Company (NASDAQ:NWLI), and First Commonwealth Financial (NYSE:FCF) to gather more data points.
If you’d ask most traders, hedge funds are perceived as slow, old investment tools of yesteryear. While there are greater than 8000 funds trading at present, Experts at Insider Monkey, a website specializing in hedge funds, look at the moguls of this group, about 700 funds. These investment experts shepherd the lion’s share of the smart money’s total capital, and by monitoring their matchless stock picks, Insider Monkey has formulated many investment strategies that have historically outrun Mr. Market. Insider Monkey’s small-cap hedge fund strategy outpaced the S&P 500 index by 12 percentage points annually for a decade in their back tests.
Now, let’s take a glance at the key action regarding Steiner Leisure Ltd (NASDAQ:STNR).
What does the smart money think about Steiner Leisure Ltd (NASDAQ:STNR)?
At the end of the third quarter, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 40% from one quarter earlier. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
According to publicly available hedge fund holdings data compiled by Insider Monkey, John Orrico’s Water Island Capital had the number one position in Steiner Leisure Ltd (NASDAQ:STNR), worth close to $24.9 million, corresponding to 1.3% of its total 13F portfolio. Sitting at the No. 2 spot is Paul Glazer of Glazer Capital, with a $9.6 million position; the fund has 1.2% of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism encompass Michael Novogratz’s Fortress Investment Group and Jim Simons’s Renaissance Technologies.
With a general bullishness amongst the heavyweights, some big names have jumped into Steiner Leisure Ltd (NASDAQ:STNR) headfirst. Water Island Capital created the most valuable position in Steiner Leisure Ltd (NASDAQ:STNR). Glazer Capital also initiated its position during the quarter. The other funds with new positions in the stock are Glenn Russell Dubin’s Highbridge Capital Management, and Noam Gottesman’s GLG Partners.
Let’s also review hedge fund activity in other stocks similar to Steiner Leisure Ltd (NASDAQ:STNR). We will take a look at Chesapeake Utilities Corporation (NYSE:CPK), National Western Life Insurance Company (NASDAQ:NWLI), First Commonwealth Financial (NYSE:FCF), and Cray Inc. (NASDAQ:CRAY). This group of stocks’ market caps match STNR’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $28 million. Steiner Leisure Ltd (NASDAQ:STNR) stands above this group as it was more popular among hedge funds at the end of September. Moreover, the company saw several funds acquire large stakes between July and September, as the top shareholders from our list were new investors in Steiner Leisure. This suggests that the stock may be headed towards more gains.