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.
Corcept Therapeutics Incorporated (NASDAQ:CORT) was in 11 hedge funds’ portfolios at the end of September. CORT has experienced a decrease in activity from the world’s largest hedge funds of late. There were 15 hedge funds in our database with CORT holdings at the end of the previous quarter. At the end of this article we will also compare CORT to other stocks including Quidel Corporation (NASDAQ:QDEL), INTL Fcstone Inc (NASDAQ:INTL), and Oritani Financial Corp. (NASDAQ:ORIT) to get a better sense of its popularity.
We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.
Hedge fund activity in Corcept Therapeutics Incorporated (NASDAQ:CORT)
At the end of the third quarter, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 27% fall from the second quarter of 2016, after bullish hedge fund positions peaked at 15. Below, you can check out the change in hedge fund sentiment towards CORT over the last 5 quarters. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Renaissance Technologies, one of the largest hedge funds in the world, holds the largest position in Corcept Therapeutics Incorporated (NASDAQ:CORT). Renaissance Technologies has a $3.6 million position in the stock. The second largest stake is held by Millennium Management, founded by Israel Englander, holding a $1.7 million position. Remaining peers that are bullish comprise John Overdeck and David Siegel’s Two Sigma Advisors, David E. Shaw’s D E Shaw, and Cliff Asness’ AQR Capital Management. 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.