Callaway Golf, WMIH Rank Among The 5 Most Popular Micro-Cap Stocks Among Hedge Funds

#3 Callaway Golf Co (NYSE:ELY)

– Number of Hedge Fund Holders (as of June 30): 29
– Total Value of Hedge Fund Holdings (as of June 30): $172.03 million
– Hedge Fund Holdings as Percent of Float (as of June 30): 17.90%

29 hedge funds owned shares of Callaway Golf Co (NYSE:ELY) at the end of the second quarter, up by one fund from the end of the prior quarter. Together those 29 funds held 17.9% of Callaway’s float, making Callaway Golf the third most-loved micro-cap stock among the hedge funds in our system. Callaway reported better-than-expected earnings for its second quarter, beating estimates by $0.06 per share with EPS of $0.36. The company also received some good news in early-August when Nike Inc. (NYSE:NKE) announced that it would stop selling golf clubs and bags. Jim Simons’ Renaissance Technologies increased its stake in Callaway by 11% to almost 1.00 million shares as of the end of June.

#2 AK Steel Holding Corporation (NYSE:AKS)

– Number of Hedge Fund Holders (as of June 30): 32
– Total Value of Hedge Fund Holdings (as of June 30): $221.39 million
– Hedge Fund Holdings as Percent of Float (as of June 30): 26.60%

Given the massive rally in steel stocks this year, it’s not surprising that 32 hedge funds were long AK Steel Holding Corporation (NYSE:AKS) at the end of the second quarter, up by 15 funds from the end of the first quarter. With some analysts predicting hot-rolled coil prices could range from $550-to-$600/ton in 2017 on the back of strong demand and potentially weaker imports, AK Steel’s EPS and selling prices could continue to beat expectations just as they did in the second quarter. Analysts have a $5.60 price target on AK Steel shares, about $1.00 above their current price.

#1 California Resources Corp (NYSE:CRC)

– Number of Hedge Fund Holders (as of June 30): 35
– Total Value of Hedge Fund Holdings (as of June 30): $139.48 million
– Hedge Fund Holdings as Percent of Float (as of June 30): 27.90%

With 28% of the float short and almost 28% of the float long by funds, California Resources Corp (NYSE:CRC) is a battleground stock. On one hand, the company’s high debt load could doom the stock if oil prices stay low. On the other hand, California Resources has substantial upside given its quality assets if WTI recovers. Our data shows the smart money is becoming more cautiously optimistic; the number of funds that we track with holdings in California Resources Corp (NYSE:CRC) rose by three quarter-over-quarter to 35 at the end of June, making the stock the most widely held micro-cap on our list.

Disclosure: None