The worries about the election and the ongoing uncertainty about the path of interest-rate increases have been keeping investors on the sidelines. Of course, most hedge funds and other asset managers have been underperforming main stock market indices since the middle of 2015. Interestingly though, smaller-cap stocks registered their best performance relative to the large-capitalization stocks since the end of the June quarter, suggesting that this may be the best time to take a cue from their stock picks. In fact, the Russell 2000 Index gained more than 15% since the beginning of the third quarter, while the Standard and Poor’s 500 benchmark returned less than 6%. This article will lay out and discuss the hedge fund and institutional investor sentiment towards Sparton Corporation (NYSE:SPA) .
Is Sparton Corporation (NYSE:SPA) ready to rally soon? Money managers are getting more bullish. The number of bullish hedge fund positions experienced an increase of 8 lately. SPA was in 15 hedge funds’ portfolios at the end of September. There were 7 hedge funds in our database with SPA positions 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 Exa Corp (NASDAQ:EXA), Monster Worldwide, Inc. (NYSE:MWW), and Build-A-Bear Workshop, Inc (NYSE:BBW) to gather more data points.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
What have hedge funds been doing with Sparton Corporation (NYSE:SPA)?
At the end of the third quarter, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a gain of 114% from the previous quarter. The graph below displays the number of hedge funds with bullish position in SPA over the last 5 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Tappan Street Partners, led by Prasad Phatak and Chris Koranda, holds the number one position in Sparton Corporation (NYSE:SPA). Tappan Street Partners has a $13.1 million position in the stock, comprising 17.8% of its 13F portfolio. On Tappan Street Partners’ heels is Beddow Capital Management, led by Ed Beddow and William Tichy, holding a $12.7 million position; the fund has 5.2% of its 13F portfolio invested in the stock. Remaining peers with similar optimism include Jim Simons’ Renaissance Technologies, and Arnaud Ajdler’s Engine Capital. We should note that Engine Capital is 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.