Is Viavi Solutions Inc (VIAV) A Good Stock To Buy?

You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.

Viavi Solutions Inc (NASDAQ:VIAV) has seen an increase in support from the world’s most elite money managers in recent months. 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 Caesars Acquisition Company (NASDAQ:CACQ), Mobile Mini Inc (NASDAQ:MINI), and Silver Standard Resources Inc. (USA) (NASDAQ:SSRI) 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.

Now, let’s check out the key action encompassing Viavi Solutions Inc (NASDAQ:VIAV).

How have hedgies been trading Viavi Solutions Inc (NASDAQ:VIAV)?

At Q3’s end, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 10% from the second quarter of 2016. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Carlson Capital, managed by Clint Carlson, holds the largest position in Viavi Solutions Inc (NASDAQ:VIAV). Carlson Capital has a $62.8 million position in the stock, comprising 0.8% of its 13F portfolio. The second largest stake is held by Jim Simons of Renaissance Technologies, with a $47.4 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other peers that are bullish contain Cliff Asness’s AQR Capital Management, Tom Sandell’s Sandell Asset Management and Israel Englander’s Millennium Management.

As one would reasonably expect, specific money managers were leading the bulls’ herd. Millennium Management, managed by Israel Englander, initiated the most outsized position in Viavi Solutions Inc (NASDAQ:VIAV). Millennium Management had $12.9 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $2.2 million investment in the stock during the quarter. The other funds with brand new VIAV positions are Ken Griffin’s Citadel Investment Group, Mike Vranos’s Ellington, and Philip Hempleman’s Ardsley Partners.

Let’s now review hedge fund activity in other stocks similar to Viavi Solutions Inc (NASDAQ:VIAV). We will take a look at Caesars Acquisition Company (NASDAQ:CACQ), Mobile Mini Inc (NASDAQ:MINI), Silver Standard Resources Inc. (USA) (NASDAQ:SSRI), and Brady Corp (NYSE:BRC). All of these stocks’ market caps are closest to VIAV’s market cap.

As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $195 million. That figure was $215 million in VIAV’s case. Brady Corp (NYSE:BRC) is the most popular stock in this table. On the other hand Mobile Mini Inc (NASDAQ:MINI) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Viavi Solutions Inc (NASDAQ:VIAV) 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.