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Cannell Capital Increases Exposure to Small-Caps with Health Insurance Innovations Inc (HIIQ)

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J. Carlo Cannell’s Cannell Capital has disclosed a new position in Health Insurance Innovations Inc (NASDAQ:HIIQ) in a recent Form 3 filing. The firm reported indirect investments in Health Insurance Innovations Inc (NASDAQ:HIIQ) with 533,948 class A common shares through Tristan Partners, L.P and 255,387 class A shares through Tristan Offshore Fund, Ltd. This is not the only small cap stock in Cannell’s portfolio as it also initiated new stakes in Genesis Healthcare Inc (NYSE:GEN), Jive Software Inc (NASDAQ:JIVE), Ring Energy Inc (NYSEMKT:REI) during the first quarter of 2015.

J. Carlo Cannell established the fund in 1992 with his personal investment of $600,000. The investment manager targets primarily small-cap companies with a value-oriented and neutral approach with respect to the market. Cannell Capital boasts an equity portfolio of $319.86 million, as reported in its latest 13F filing with the SEC. The major investment areas of the fund manager include information technology followed by consumer discretionary and utilities & communication sector.

Carlo Cannell

Let’s first take a step back and analyze how tracking hedge funds can help an everyday investor. Through our research, we discovered that a portfolio of the 15 most popular small-cap picks of hedge funds beat the S&P 500 Total Return Index by nearly a percentage point per month on average between 1999 and 2012. On the other hand the most popular large-cap picks of hedge funds underperformed the same index by seven basis points per month during the same period. This is likely a surprise to many investors, who think of small-caps as risky, unpredictable stocks and put more faith in large-cap stocks. In forward tests since August 2012 these top small-cap stocks beat the market by an impressive 84 percentage points, returning over 144% (read the details here). Hence a retail investor needs to isolate himself from the herd and take advantage of the best growth opportunities in the market by concentrating on small-cap stocks.

Recently, the founder of Health Insurance Innovations Inc (NASDAQ:HIIQ) a Tampa-base health insurance seller, Michael Kosloske, has stepped down from the position of President leaving the chair in the hands of Patrick McNamee. Among analysts, the stock of Health Insurance Innovations Inc (NASDAQ:HIIQ) has received an average “Buy” rating with one year average price target of $8.17 indicating an upside of more than 60% from its current share prices. Joe Huber‘s Huber Capital Management and Jacob Gottlieb’s Visium Asset Management are among the major shareholders of Health Insurance Innovations Inc (NASDAQ:HIIQ).

J. Carlo Cannell
J. Carlo Cannell
Cannell Capital

In its 13F filing for the reporting period ended March 31, 2015, Cannell reported a new position in Genesis Healthcare Inc (NYSE:GEN) with 1.49 million shares valued at $10.58 million. Genesis is a healthcare group, which has recently announced the acquisition of 24 nursing facilities of Revera Inc. for $240 million along with the contract rehabilitation business of the latter. The deal involves the real estate of 20 of these facilities and a long-term lease agreement with Health Care REIT, Inc. (NYSE:HCN) for the remaining four facilities. This transaction will help Genesis Healthcare Inc (NYSE:GEN) maintain a strong foot in its primary markets including Northeast, Washington, and New Jersey. The stock ot the post-acute care provider company has lost 24.12% year-to-date and it has market cap of $1.03 billion.

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