Did Hedge Funds Drop The Ball On InterXion Holding NV (INXN) ?

Does InterXion Holding NV (NYSE:INXN) represent a good buying opportunity at the moment? Let’s briefly check the hedge fund interest towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on satellite photos and other research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail inconceivably on some occasions, but net net their stock picks have been generating superior risk-adjusted returns on average over the years.

InterXion Holding NV (NYSE:INXN) was in 28 hedge funds’ portfolios at the end of the fourth quarter of 2018. INXN shareholders have witnessed a decrease in enthusiasm from smart money of late. There were 31 hedge funds in our database with INXN holdings at the end of the previous quarter. Our calculations also showed that INXN isn’t among the 30 most popular stocks among hedge funds.

If you’d ask most stock holders, hedge funds are seen as unimportant, outdated investment tools of yesteryear. While there are more than 8000 funds with their doors open at the moment, Our researchers hone in on the moguls of this group, about 750 funds. It is estimated that this group of investors oversee the majority of the smart money’s total asset base, and by watching their finest equity investments, Insider Monkey has figured out many investment strategies that have historically outrun the broader indices. Insider Monkey’s flagship hedge fund strategy exceeded the S&P 500 index by nearly 5 percentage points a year since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 27.5% since February 2017 (through March 12th) even though the market was up nearly 25% during the same period. We just shared a list of 6 short targets in our latest quarterly update and they are already down an average of 6% in less than a month.

Ricky Sandler, Eminence Capital

We’re going to take a look at the recent hedge fund action encompassing InterXion Holding NV (NYSE:INXN).

How have hedgies been trading InterXion Holding NV (NYSE:INXN)?

At Q4’s end, a total of 28 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -10% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in INXN over the last 14 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.


Of the funds tracked by Insider Monkey, Ricky Sandler’s Eminence Capital has the number one position in InterXion Holding NV (NYSE:INXN), worth close to $152.8 million, amounting to 3% of its total 13F portfolio. On Eminence Capital’s heels is Echo Street Capital Management, led by Greg Poole, holding a $133.3 million position; the fund has 3.4% of its 13F portfolio invested in the stock. Some other members of the smart money with similar optimism encompass Barry Lebovits and Joshua Kuntz’s Rivulet Capital, Ken Griffin’s Citadel Investment Group and Douglas Dossey and Arthur Young’s Tensile Capital.

Because InterXion Holding NV (NYSE:INXN) has faced bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there were a few hedgies that slashed their entire stakes in the third quarter. Intriguingly, Jonathan Soros’s JS Capital dropped the largest stake of the 700 funds tracked by Insider Monkey, worth an estimated $6.7 million in stock, and David Harding’s Winton Capital Management was right behind this move, as the fund cut about $5.9 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 3 funds in the third quarter.

Let’s check out hedge fund activity in other stocks similar to InterXion Holding NV (NYSE:INXN). We will take a look at Pilgrim’s Pride Corporation (NASDAQ:PPC), 51job, Inc. (NASDAQ:JOBS), Blackstone Mortgage Trust Inc (NYSE:BXMT), and BlackBerry Limited (NYSE:BB). This group of stocks’ market valuations match INXN’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PPC 17 111166 1
JOBS 13 24137 -1
BXMT 16 129325 2
BB 23 581395 5
Average 17.25 211506 1.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 17.25 hedge funds with bullish positions and the average amount invested in these stocks was $212 million. That figure was $637 million in INXN’s case. BlackBerry Limited (NYSE:BB) is the most popular stock in this table. On the other hand 51job, Inc. (NASDAQ:JOBS) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks InterXion Holding NV (NYSE:INXN) is more popular among hedge funds. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Hedge funds were also right about betting on INXN, though not to the same extent, as the stock returned 23.7% and outperformed the market as well.

Disclosure: None. This article was originally published at Insider Monkey.