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: Haynes International, Inc. (NASDAQ:HAYN) .
Haynes International, Inc. (NASDAQ:HAYN) was in 8 hedge funds’ portfolios at the end of the third quarter of 2016. HAYN has seen an increase in activity from the world’s largest hedge funds lately. There were 7 hedge funds in our database with HAYN positions at the end of the previous quarter. At the end of this article we will also compare HAYN to other stocks including NACCO Industries, Inc. (NYSE:NC), Exar Corporation (NASDAQ:EXAR), and Timkensteel Corp (NYSE:TMST) to get a better sense of its popularity.
We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.
How have hedgies been trading Haynes International, Inc. (NASDAQ:HAYN)?
At Q3’s end, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, up by 14% from one quarter earlier. By comparison, 7 hedge funds held shares or bullish call options in HAYN heading into this year. So, let’s examine 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, Chuck Royce’s Royce & Associates has the number one position in Haynes International, Inc. (NASDAQ:HAYN), worth close to $34.6 million. The second largest stake is held by Mario Gabelli of GAMCO Investors, with a $4.4 million position. Some other peers that are bullish contain John Overdeck and David Siegel’s Two Sigma Advisors, Ken Griffin’s Citadel Investment Group and D E Shaw, one of the biggest hedge funds in the world. 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.