Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is the small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we follow the hedge fund activity in the small-cap space.
Fabrinet (NYSE:FN) has experienced an increase in activity from the world’s largest hedge funds in recent months, with ownership of the stock jumping by a net total of 5. 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 Hub Group Inc (NASDAQ:HUBG), Ladder Capital Corp (NYSE:LADR), and The Navigators Group, Inc (NASDAQ:NAVG) 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.
How are hedge funds trading Fabrinet (NYSE:FN)?
Heading into the fourth quarter of 2016, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 28% jump from the previous quarter, pushing hedgie ownership of the stock to a yearly high. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Whale Rock Capital Management, managed by Alex Sacerdote, holds the largest position in Fabrinet (NYSE:FN). Whale Rock Capital Management has a $53.5 million position in the stock, comprising 3.5% of its 13F portfolio. On Whale Rock Capital Management’s heels is Ken Hahn of Quentec Asset Management, with a $32.2 million position; 4.4% of its 13F portfolio is allocated to the company. Other professional money managers that hold long positions include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Richard Driehaus’ Driehaus Capital and Bruce Garelick’s Garelick Capital Partners.