Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those elite funds in these small-cap stocks. In the following paragraphs, we analyze Piper Jaffray Companies (NYSE:PJC) from the perspective of those elite funds.
Piper Jaffray Companies (NYSE:PJC) has seen an increase in hedge fund interest lately. 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 Perficient, Inc. (NASDAQ:PRFT), Newport Corporation (NASDAQ:NEWP), and Marten Transport, Ltd (NASDAQ:MRTN) to gather more data points.
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In the 21st century investor’s toolkit there are many methods stock market investors have at their disposal to evaluate publicly traded companies. A couple of the best methods are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the top picks of the top hedge fund managers can outpace the market by a healthy margin (see the details here).
With all of this in mind, let’s analyze the latest action surrounding Piper Jaffray Companies (NYSE:PJC).
What have hedge funds been doing with Piper Jaffray Companies (NYSE:PJC)?
At the Q3’s end, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 42% from the second quarter. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Millennium Management, managed by Israel Englander, holds the number one position in Piper Jaffray Companies (NYSE:PJC). Millennium Management has a $22.8 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Cliff Asness of AQR Capital Management, with a $4.1 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors that hold long positions encompass Gregg Moskowitz’s Interval Partners and Jim Simons’ Renaissance Technologies.
As industrywide interest jumped, key hedge funds have been driving this bullishness. Fisher Asset Management, managed by Ken Fisher, initiated the most valuable position in Piper Jaffray Companies (NYSE:PJC). Fisher Asset Management had $3.6 million invested in the company at the end of the quarter. Doug Gordon, Jon Hilsabeck and Don Jabro’s Shellback Capital also initiated a $2.6 million position during the quarter. The other funds with brand new PJC positions are Lawrence Sapanski’s Scoria Capital, Mike Vranos’s Ellington, and Millennium Management Subsidiary’s Blue Arrow Capital Management.
Let’s go over hedge fund activity in other stocks similar to Piper Jaffray Companies (NYSE:PJC). These stocks are Perficient, Inc. (NASDAQ:PRFT), Newport Corporation (NASDAQ:NEWP), Marten Transport, Ltd (NASDAQ:MRTN), and Del Taco Restaurants Inc (NASDAQ:TACO). This group of stocks’ market values resemble PJC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PRFT | 9 | 9378 | 3 |
| NEWP | 20 | 85174 | 2 |
| MRTN | 16 | 28821 | 0 |
| TACO | 24 | 161012 | 2 |
As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $71 million. That figure was $49 million in PJC’s case. Del Taco Restaurants Inc (NASDAQ:TACO) is the most popular stock in this table. On the other hand Perficient, Inc. (NASDAQ:PRFT) is the least popular one with only 9 bullish hedge fund positions. Piper Jaffray Companies (NYSE:PJC) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard TACO might be a better candidate to consider a long position.
