Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
Tilly’s Inc (NYSE:TLYS) has experienced an increase in hedge fund interest in recent months. TLYS was in 11 hedge funds’ portfolios at the end of the third quarter of 2016. There were 7 hedge funds in our database with TLYS holdings at the end of the previous quarter. At the end of this article we will also compare TLYS to other stocks including Limoneira Company (NASDAQ:LMNR), Tuesday Morning Corporation (NASDAQ:TUES), and Clearfield, Inc. (NASDAQ:CLFD) to get a better sense of its popularity.
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With all of this in mind, let’s take a look at the fresh action regarding Tilly’s Inc (NYSE:TLYS).
What does the smart money think about Tilly’s Inc (NYSE:TLYS)?
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 change of 57% from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards TLYS over the last 5 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Renaissance Technologies, one of the biggest hedge funds in the world, holds the most valuable position in Tilly’s Inc (NYSE:TLYS). Renaissance Technologies has a $6.2 million position in the stock, comprising less than 0.1% of its 13F portfolio. Coming in second is AQR Capital Management, led by Cliff Asness, holding a $1 million position; less than 0.1% of its 13F portfolio is allocated to the company. Remaining professional money managers that are bullish include John Overdeck and David Siegel’s Two Sigma Advisors, and 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.
Now, key elite funds have been driving this bullishness. Springbok Capital, led by Gavin Saitowitz and Cisco J. del Valle, created the most outsized position in Tilly’s Inc (NYSE:TLYS). Springbok Capital had $0.3 million invested in the company at the end of the quarter. Mike Vranos’s Ellington also made a $0.2 million investment in the stock during the quarter. The other funds with brand new TLYS positions are Chuck Royce’s Royce & Associates, Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk’s GRT Capital Partners, and Ken Griffin’s Citadel Investment Group.
Let’s now review hedge fund activity in other stocks similar to Tilly’s Inc (NYSE:TLYS). These stocks are Limoneira Company (NASDAQ:LMNR), Tuesday Morning Corporation (NASDAQ:TUES), Clearfield, Inc. (NASDAQ:CLFD), and AgroFresh Solutions Inc (NASDAQ:AGFS). All of these stocks’ market caps match TLYS’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 6 hedge funds with bullish positions and the average amount invested in these stocks was $14 million. That figure was $10 million in TLYS’s case. AgroFresh Solutions Inc (NASDAQ:AGFS) is the most popular stock in this table. On the other hand Limoneira Company (NASDAQ:LMNR) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Tilly’s Inc (NYSE:TLYS) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.