Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: Inter Parfums, Inc. (NASDAQ:IPAR).
Inter Parfums, Inc. (NASDAQ:IPAR) investors should be aware of an increase in support from the world’s most successful money managers of late. IPAR was in 11 hedge funds’ portfolios at the end of September. There were 7 hedge funds in our database with IPAR positions at the end of the second quarter. At the end of this article we will also compare IPAR to other stocks including Green Plains Renewable Energy Inc. (NASDAQ:GPRE), Xencor Inc (NASDAQ:XNCR), and Greenbrier Companies Inc (NYSE:GBX) to get a better sense of its popularity.
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.
What does the smart money think about Inter Parfums, Inc. (NASDAQ:IPAR)?
Heading into the fourth quarter of 2016, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 57% jump from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards IPAR over the last 5 quarters, which has more than doubled in the past two. So, let’s examine 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, Royce & Associates, led by Chuck Royce, holds the largest position in Inter Parfums, Inc. (NASDAQ:IPAR). Royce & Associates has a $17.1 million position in the stock. The second largest stake is held by Renaissance Technologies, one of the largest hedge funds in the world, holding an $8.3 million position. Some other hedge funds and institutional investors that hold long positions consist of Columbus Circle Investors, Murray Stahl’s Horizon Asset Management, and Israel Englander’s Millennium Management. 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.