Reputable billionaire investors such as Nelson Peltz and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won’t accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.
Virtusa Corporation (NASDAQ:VRTU) was in 7 hedge funds’ portfolios at the end of September. VRTU has seen a decrease in hedge fund interest in recent months. There were 11 hedge funds in our database with VRTU positions at the end of the previous quarter. At the end of this article we will also compare VRTU to other stocks including CEVA, Inc. (NASDAQ:CEVA), Speedway Motorsports, Inc. (NYSE:TRK), and Piper Jaffray Companies (NYSE:PJC) to get a better sense of its popularity.
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.
Keeping this in mind, we’re going to go over the fresh action regarding Virtusa Corporation (NASDAQ:VRTU).
Hedge fund activity in Virtusa Corporation (NASDAQ:VRTU)
At the end of the third quarter, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a plunge of 36% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards VRTU over the last 5 quarters. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, George McCabe’s Portolan Capital Management has the most valuable position in Virtusa Corporation (NASDAQ:VRTU), worth close to $7.9 million, accounting for 1.1% of its total 13F portfolio. The second most bullish fund manager is P.A.W. CAPITAL PARTNERS, led by Peter A. Wright, holding a $6.2 million position; 6.6% of its 13F portfolio is allocated to the company. Other peers that are bullish encompass Ken Griffin’s Citadel Investment Group, Warren Lammert’s Granite Point Capital and Roger Ibbotson’s Zebra Capital 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.