Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those successful funds in these small-cap stocks. In the following paragraphs, we analyze Stewart Information Services Corp (NYSE:STC) from the perspective of those successful funds.
Is Stewart Information Services Corp (NYSE:STC) a buy, sell, or hold? Hedge funds are getting more bullish. The number of bullish hedge fund positions that are disclosed in regulatory 13F filings went up by 6 in recent months. There were 14 hedge funds in our database with STC positions at the end of the previous quarter. At the end of this article we will also compare STC to other stocks including National CineMedia, Inc. (NASDAQ:NCMI), AVG Technologies NV (NYSE:AVG), and SAGE Therapeutics Inc (NASDAQ:SAGE) to get a better sense of its popularity.
Follow Stewart Information Services Corp (NYSE:STC)
Follow Stewart Information Services Corp (NYSE:STC)
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.
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How are hedge funds trading Stewart Information Services Corp (NYSE:STC)?
At Q3’s end, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 43% from the previous quarter. By comparison, 19 hedge funds held shares or bullish call options in STC heading into this year. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Jeffrey Smith’s Starboard Value LP has the largest position in Stewart Information Services Corp (NYSE:STC), worth close to $102.9 million, amounting to 2.8% of its total 13F portfolio. Coming in second is David Charney and Sky Wilber of Foundation Asset Management, with a $58.3 million position; 19.7% of its 13F portfolio is allocated to the company. Some other members of the smart money that are bullish consist of Phillip Goldstein, Andrew Dakos and Steven Samuels’ Bulldog Investors, Jim Simons’ Renaissance Technologies and Manoneet Singh’s Kavi Asset Management. We should note that two of these hedge funds (Starboard Value LP and Foundation Asset Management) 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.
As industrywide interest jumped, key hedge funds have jumped into Stewart Information Services Corp (NYSE:STC) headfirst. Starboard Value LP created the biggest position in Stewart Information Services Corp (NYSE:STC).Ric hard Barrera’s Roystone Capital Partners also made a $11.1 million investment in the stock during the quarter. The other funds with brand new STC positions are Michael Kaine’s Numina Capital, Israel Englander’s Millennium Management, and Kenneth Squire’s 13D Management.
Let’s now review hedge fund activity in other stocks similar to Stewart Information Services Corp (NYSE:STC). These stocks are National CineMedia, Inc. (NASDAQ:NCMI), AVG Technologies NV (NYSE:AVG), SAGE Therapeutics Inc (NASDAQ:SAGE), and EnPro Industries, Inc. (NYSE:NPO). This group of stocks’ market values match STC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NCMI | 12 | 66835 | -1 |
| AVG | 14 | 64320 | -4 |
| SAGE | 18 | 277510 | -4 |
| NPO | 12 | 216152 | -3 |
As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $156 million. That figure was $309 million in STC’s case. SAGE Therapeutics Inc (NASDAQ:SAGE) is the most popular stock in this table. On the other hand National CineMedia, Inc. (NASDAQ:NCMI) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Stewart Information Services Corp (NYSE:STC) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None
