Bets on Herbalife Ltd. (HLF) and Argentina Pay Off Big for Special Situations-Focused Fund

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When it comes to hedge funds, big media outlets generally cover only the big names like Bill Ackman, Carl Icahn, and George Soros. And it makes sense; these names have a long record of investing in the market and have even been involved in activist campaigns and proxy fights that can change the course of a large company’s operations. For example, Icahn played a crucial role in a number of spin-offs, including at Xerox Corp (NYSE:XRX), eBay Inc (NASDAQ:EBAY) and Hertz Global Holdings, Inc (NYSE:HTZ), to name a few. Ackman is currently on a crusade to prove that Herbalife Ltd. (NYSE:HLF) is a pyramid scheme, while George Soros, aside from his reputation as a great investor, is also considered the embodiment of evil by most anti-liberals in Central and Eastern Europe.

However, following big funds and trying to imitate their stock picks is unlikely to be a good strategy for a smaller investor. Some of these funds are conservative in their approach and prefer to put their money into big companies with solid financials and well-established business models that provide minimum risk, but their returns are pretty modest as a result. And while there’s nothing wrong with investing conservatively, small investors don’t really have the resources to benefit from this strategy.

So, what should one do? The obvious solution is to research a lot of stocks, then identify those that provide the optimal level of return in exchange for the level of risk that one can take. However, there are thousands of companies trading daily on stock exchanges and it can be difficult to identify the profitable bets. This is why looking at stocks that smart money likes to buy is very useful. However, the key is not to look at all big funds, but at smaller funds that are often flying under the radar. Those funds often score big, but barely anybody has heard about them.

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This is where we come in. At Insider Monkey we follow over 700 different hedge funds and other institutional investors. Through analyzing their stock picks revealed in quarterly 13F filings, we identify a number of stocks that we share with our subscribers in premium newsletters. Our flagship strategy generated a return of 44.2% since February 2016, beating the S&P 500 ETF (SPY)’s 30% gain. Our previous batch of stock picks, released in February, have already outperformed the broader indexes by 5 percentage points in three months and we have recently shared our May picks with our subscribers, which you still have time to get in on by accessing this link. We also currently have a limited-time offer of a 14-day money back guarantee, so you have nothing to lose.

Among the funds that we follow, many are generating great returns, but either because of their size or because they were launched not overly long ago, they are usually unknown. One of these funds is Sarissa Capital Management, whose stock picks returned 200% in the last year (see some of its stock picks here). Another one is Serengeti Asset Management, which is already 27% in the green year-to-date, according to our calculations, and in this article, we are going to take a closer look at some of its winning bets, beginning on the next page.

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