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Should You Following the Growing Number of Hedge Funds into Quad/Graphics, Inc. (QUAD)?

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Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.

Is Quad/Graphics, Inc. (NYSE:QUAD) a buy, sell, or hold? Money managers are getting more optimistic. The number of bullish hedge fund bets advanced by 3 lately. QUAD was in 21 hedge funds’ portfolios at the end of September. There were 18 hedge funds in our database with QUAD holdings at the end of the previous quarter. 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 Celestica Inc. (USA) (NYSE:CLS), Nationstar Mortgage Holdings Inc (NYSE:NSM), and II-VI, Inc. (NASDAQ:IIVI) to gather more data points.

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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.

Brian A Jackson/Shutterstock.com

Brian A Jackson/Shutterstock.com

Hedge fund activity in Quad/Graphics, Inc. (NYSE:QUAD)

At the end of the third quarter, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a 17% rise from one quarter earlier, and the third consecutive quarter in which the number of hedge funds long the stock increased. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

HedgeFundSentimentChart

Of the funds tracked by Insider Monkey, Jim Simons’ Renaissance Technologies has the most valuable position in Quad/Graphics, Inc. (NYSE:QUAD), worth close to $39.4 million. The second most bullish fund manager is Elm Ridge Capital, led by Ron Gutfleish, holding a $13.5 million position; 3.2% of its 13F portfolio is allocated to the stock. Some other peers with similar optimism comprise Cliff Asness’ AQR Capital Management, Joel Greenblatt’s Gotham Asset Management and Israel Englander’s Millennium Management.

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