There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other successful funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze VAALCO Energy, Inc. (NYSE:EGY) .
VAALCO Energy, Inc. (NYSE:EGY) was in 9 hedge funds’ portfolios at the end of the third quarter of 2016. EGY has experienced an increase in hedge fund interest recently. There were 5 hedge funds in our database with EGY positions at the end of the previous quarter. At the end of this article we will also compare EGY to other stocks including Christopher & Banks Corporation (NYSE:CBK), ParkerVision, Inc. (NASDAQ:PRKR), and Palatin Technologies, Inc. (NYSEAMEX:PTN) to get a better sense of its popularity.
We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.
Keeping this in mind, we’re going to take a glance at the latest action regarding VAALCO Energy, Inc. (NYSE:EGY).
How are hedge funds trading VAALCO Energy, Inc. (NYSE:EGY)?
Heading into the fourth quarter of 2016, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 80% from one quarter earlier. On the other hand, there were a total of 7 hedge funds with a bullish position in EGY at the beginning of this year. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Jeffrey E. Eberwein’s Lone Star Value Management has the largest position in VAALCO Energy, Inc. (NYSE:EGY), worth close to $3.5 million, accounting for 6.7% of its total 13F portfolio. Coming in second is Renaissance Technologies, one of the largest hedge funds in the world with a $1 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining members of the smart money with similar optimism comprise D. E. Shaw’s D E Shaw, Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk’s GRT Capital Partners and Cliff Asness’s AQR Capital Management. We should note that GRT Capital Partners is 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.