Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
Umpqua Holdings Corp (NASDAQ:UMPQ) shareholders have witnessed an increase in hedge fund sentiment of late, with a net total of 3 more hedgies now owning the stock. 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 Assured Guaranty Ltd. (NYSE:AGO), Bank Of The Ozarks Inc (NASDAQ:OZRK), and Akorn, Inc. (NASDAQ:AKRX) 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.
Hedge fund activity in Umpqua Holdings Corp (NASDAQ:UMPQ)
At the end of the third quarter, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, an 18% gain from the previous quarter. Hedge fund ownership has increased in each of the last three quarters, pushing it to its highest total in the last year. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Millennium Management, managed by Israel Englander, holds the biggest position in Umpqua Holdings Corp (NASDAQ:UMPQ). Millennium Management has a $75.9 million position in the stock. The second largest stake is held by Fisher Asset Management, led by Ken Fisher, holding a $73.4 million position. Some other hedge funds and institutional investors with similar optimism comprise Chuck Royce’s Royce & Associates, Mark Lee’s Forest Hill Capital and John Overdeck and David Siegel’s Two Sigma Advisors.