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 elite funds in these small-cap stocks. In the following paragraphs, we analyze Summit Materials Inc (NYSE:SUM) from the perspective of those elite funds.
Summit Materials Inc (NYSE:SUM) shareholders have witnessed an increase in activity from the world’s largest hedge funds lately, with 4 more hedge funds owning the company’s shares. 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 Allscripts Healthcare Solutions Inc (NASDAQ:MDRX), Lexington Realty Trust (NYSE:LXP), and Lexmark International Inc (NYSE:LXK) 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.
What does the smart money think about Summit Materials Inc (NYSE:SUM)?
At the end of the third quarter, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 18% from the second quarter of 2016, a nice rebound after hedge fund ownership had slid throughout much of the year. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Gabriel Plotkin’s Melvin Capital Management has the number one position in Summit Materials Inc (NYSE:SUM), worth close to $64.9 million, accounting for 1.7% of its total 13F portfolio. Coming in second is Phill Gross and Robert Atchinson of Adage Capital Management, with a $62.1 million position. Some other professional money managers that are bullish include Steve Cohen’s Point72 Asset Management, Ken Griffin’s Citadel Investment Group, and Israel Englander’s Millennium Management.