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 Pace Holdings Corp (NASDAQ:PACE) from the perspective of those successful funds.
Pace Holdings Corp (NASDAQ:PACE) shares didn’t see a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 20 hedge funds’ portfolios at the end of September. At the end of this article we will also compare PACE to other stocks including Vera Bradley, Inc. (NASDAQ:VRA), Nanometrics Incorporated (NASDAQ:NANO), and PDL BioPharma Inc. (NASDAQ:PDLI) to get a better sense of its popularity.
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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.
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What does the smart money think about Pace Holdings Corp (NASDAQ:PACE)?
Heading into the fourth quarter of 2016, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, unchanged from one quarter earlier. On the other hand, there were a total of 21 hedge funds with a bullish position in PACE at the beginning of this year. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Glenn Russell Dubin’s Highbridge Capital Management has the most valuable position in Pace Holdings Corp (NASDAQ:PACE), worth close to $32.2 million. On Highbridge Capital Management’s heels is Nick Niell of Arrowgrass Capital Partners, with a $25.6 million position. Some other hedge funds and institutional investors with similar optimism consist of Isaac Corre’s Governors Lane, and Anand Parekh’s Alyeska Investment Group. We should note that none of these hedge funds 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.