Hedge funds and other investment firms that we track manage billions of dollars of their wealthy clients’ money, and needless to say, they are painstakingly thorough when analyzing where to invest this money, as their own wealth depends on it. Regardless of the various methods used by elite investors like David Tepper and Dan Loeb, the resources they expend are second-to-none. This is especially valuable when it comes to small-cap stocks, which is where they generate their strongest outperformance, as their resources give them a huge edge when it comes to studying these stocks compared to the average investor, which is why we intently follow their activity in the small-cap space.
Is LinnCo LLC (NASDAQ:LNCO) ready to rally soon? Hedge funds are becoming hopeful. The number of bullish hedge fund positions moved up by five in recent months. At the end of this article we will also compare LinnCo LLC (NASDAQ:LNCO) to other stocks including Pfenex Inc (NYSEMKT:PFNX), Kimball Electronics Inc (NASDAQ:KE), and Ocular Therapeutix Inc (NASDAQ:OCUL) to get a better sense of its popularity.
In the eyes of most shareholders, hedge funds are viewed as unimportant, outdated financial vehicles of yesteryear. While there are more than 8,000 funds in operation at present, our experts choose to focus on the top tier of this group, around 700 funds. These money managers control the lion’s share of the smart money’s total asset base, and by monitoring their highest performing stock picks, Insider Monkey has unearthed many investment strategies that have historically exceeded the broader indices. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 12 percentage points per annum for a decade in its backtests.
With all of this in mind, let’s review the key action surrounding LinnCo LLC (NASDAQ:LNCO).
What does the smart money think about LinnCo LLC (NASDAQ:LNCO)?
Heading into Q4, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 63% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
When looking at the hedgies followed by Insider Monkey, GMT Capital, managed by Thomas E. Claugus, holds the number one position in LinnCo LLC (NASDAQ:LNCO). GMT Capital has a $3.7 million position in the stock, comprising 0.1% of its 13F portfolio. The second-largest stake is held by Robert Vollero and Gentry T. Beach of Vollero Beach Capital Partners, with a $2.1 million position; 0.4% of its 13F portfolio is allocated to the stock. Remaining members of the smart money with similar optimism encompass Bruce J. Richards and Louis Hanover’s Marathon Asset Management, David Costen Haley’s HBK Investments, and Ken Griffin’s Citadel Investment Group.
As industrywide interest jumped, some big names have been driving this bullishness. Marathon Asset Management initiated the most valuable position in LinnCo LLC (NASDAQ:LNCO). Marathon Asset Management had $1.5 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $0.4 million investment in the stock during the quarter. The following funds were also among the new LNCO investors: John Overdeck and David Siegel’s Two Sigma Advisors, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as LinnCo LLC (NASDAQ:LNCO) but similarly valued. These stocks are Pfenex Inc (NYSEMKT:PFNX), Kimball Electronics Inc (NASDAQ:KE), Ocular Therapeutix Inc (NASDAQ:OCUL), and NeoGenomics, Inc. (NASDAQ:NEO). This group of stocks’ market caps are similar to LinnCo LLC (NASDAQ:LNCO)’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $31 million. That figure was $11 millions in LinnCo LLC (NASDAQ:LNCO)’s case. Ocular Therapeutix Inc (NASDAQ:OCUL) is the most popular stock in this table. On the other hand NeoGenomics, Inc. (NASDAQ:NEO) is the least popular one with only nine bullish hedge fund positions. Compared to these stocks LinnCo LLC (NASDAQ:LNCO) is more popular among hedge funds, though they have less money invested on average. Considering that hedge funds are generally fond of this stock and interest is growing, it may be a good idea to analyze it in detail and potentially include it in your portfolio.