Looking for high-potential stocks? Just follow the big players within the hedge fund industry. Why should you do so? Let’s take a brief look at what statistics have to say about hedge funds’ stock picking abilities to illustrate. The Standard and Poor’s 500 Index returned approximately 7.6% in the 12 months ending November 21, with more than 51% of the stocks in the index failing to beat the benchmark. Therefore, the odds that one will pin down a winner by randomly picking a stock are less than the odds in a fair coin-tossing game. Conversely, best performing hedge funds’ 30 preferred mid-cap stocks generated a return of 18% during the same 12-month period. Coincidence? It might happen to be so, but it is unlikely. Our research covering a 17-year period indicates that hedge funds’ stock picks generate superior risk-adjusted returns. That’s why we believe it is wise to check hedge fund activity before you invest your time or your savings on a stock like Double Eagle Acqusition Corp (NASDAQ:EAGL) .
Double Eagle Acqusition Corp (NASDAQ:EAGL) investors should be aware of a decrease in activity from the world’s largest hedge funds lately. There were 17 hedge funds in our database with EAGL holdings at the end of the third 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 Westlake Chemical Partners LP (NYSE:WLKP), Ultratech, Inc. (NASDAQ:UTEK), and tronc Inc (NASDAQ:TRNC) 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.
Now, let’s review the key action encompassing Double Eagle Acqusition Corp (NASDAQ:EAGL).
What does the smart money think about Double Eagle Acqusition Corp (NASDAQ:EAGL)?
Heading into the fourth quarter of 2016, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a drop of 15% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards EAGL over the last 5 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Nick Niell’s Arrowgrass Capital Partners has the largest position in Double Eagle Acqusition Corp (NASDAQ:EAGL), worth close to $25.4 million. The second most bullish fund manager is Andrew Weiss of Weiss Asset Management, with a $24.9 million position; the fund has 4.6% of its 13F portfolio invested in the stock. Some other professional money managers that are bullish comprise Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital, Glenn Russell Dubin’s Highbridge Capital Management and Isaac Corre’s Governors Lane. 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.