The successful funds run by legendary investors such as Dan Loeb and David Tepper make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentive to do the research necessary to beat the market. That’s why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at John Wiley & Sons Inc (NYSE:JW.A) from the perspective of those successful funds.
John Wiley & Sons Inc (NYSE:JW.A) was in 12 hedge funds’ portfolios at the end of September. JW.A has seen a decrease in hedge fund interest recently. There were 14 hedge funds in our database with JW.A holdings at the end of the previous quarter. 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 Nevro Corp (NYSE:NVRO), Telephone & Data Systems, Inc. (NYSE:TDS), and Intersil Corp (NASDAQ:ISIL) to gather more data points.
We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.
With all of this in mind, let’s take a look at the fresh action surrounding John Wiley & Sons Inc (NYSE:JW.A).
Hedge fund activity in John Wiley & Sons Inc (NYSE:JW.A)
At Q3’s end, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a drop of 14% from the second quarter of 2016. On the other hand, there were a total of 15 hedge funds with a bullish position in JW.A at the beginning of this year. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, AQR Capital Management, led by Cliff Asness, holds the largest position in John Wiley & Sons Inc (NYSE:JW.A). AQR Capital Management has a $38.7 million position in the stock, comprising 0.1% of its 13F portfolio. The second most bullish fund manager is Chuck Royce of Royce & Associates, with a $13.6 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other peers that are bullish include Israel Englander’s Millennium Management, one of the 10 largest hedge funds in the world, John Overdeck and David Siegel’s Two Sigma Advisors and D. E. Shaw’s D E Shaw. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.