Hedge funds and other investment firms that we track manage billions of dollars of their wealthy clients’ money, and needless to say, they are painstakingly thorough when analyzing where to invest this money, as their own wealth depends on it. Regardless of the various methods used by elite investors like David Tepper and Dan Loeb, the resources they expend are second-to-none. This is especially valuable when it comes to small-cap stocks, which is where they generate their strongest outperformance, as their resources give them a huge edge when it comes to studying these stocks compared to the average investor, which is why we intently follow their activity in the small-cap space.
FireEye Inc (NASDAQ:FEYE) was in 37 hedge funds’ portfolios at the end of the third quarter of 2015. FEYE has experienced an increase in support from the world’s most elite money managers in recent months. There were 35 hedge funds in our database with FEYE holdings at the end of the previous quarter. At the end of this article we will also compare FEYE to other stocks including Edgewell Personal Care Company (NYSE:EPC), Nuance Communications Inc. (NASDAQ:NUAN), and Tegna Inc (NYSE:TGNA) to get a better sense of its popularity.
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Today there are dozens of tools shareholders have at their disposal to size up their stock investments. Some of the most useful tools are hedge fund and insider trading interest. Experts at hedge fund tracking site Insider Monkey have shown that, historically, those who follow the top picks of the best money managers can trounce the S&P 500 by a healthy margin (see the details here).
Now, we’re going to take a look at the fresh action surrounding FireEye Inc (NASDAQ:FEYE).
How are hedge funds trading FireEye Inc (NASDAQ:FEYE)?
At Q3’s end, a total of 37 of the hedge funds tracked by Insider Monkey were long in this stock, 6% greater than the previous quarter. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their holdings significantly.
According to hedge fund experts at Insider Monkey, Karthik Sarma’s SRS Investment Management had the largest position in FireEye Inc (NASDAQ:FEYE), worth close to $142.4 million, comprising 4.7% of its total 13F portfolio. Sitting in second was AQR Capital Management, managed by Cliff Asness, which held a $26.7 million position; 0.1% of its 13F portfolio was allocated to the company. Other members of the smart money with similar optimism comprised Jim Simons’ Renaissance Technologies, Israel Englander’s Millennium Management, and Ken Griffin’s Citadel Investment Group.
As industrywide interest jumped, key hedge funds were breaking ground themselves. Millennium Management established the largest position in FireEye Inc (NASDAQ:FEYE), having $23.7 million invested in the company at the end of the quarter. Brian Ashford-Russell and Tim Woolley’s Polar Capital also made a $6.3 million investment in the stock during the quarter. The other funds with brand new FEYE positions are Matthew Tewksbury’s Stevens Capital Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and David Costen Haley’s HBK Investments.
Let’s also examine hedge fund activity in other stocks similar to FireEye Inc (NASDAQ:FEYE). These stocks are Edgewell Personal Care Company (NYSE:EPC), Nuance Communications Inc. (NASDAQ:NUAN), Tegna Inc (NYSE:TGNA), and Tyler Technologies, Inc. (NYSE:TYL). This group of stocks’ market caps are similar to FEYE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EPC | 34 | 749305 | 18 |
| NUAN | 30 | 1153747 | 5 |
| TGNA | 21 | 1012114 | 1 |
| TYL | 13 | 143812 | 0 |
As you can see these stocks had an average of 24.5 hedge funds with bullish positions and the average amount invested in these stocks was $765 million, while $384 million was invested in FireEye. Edgewell Personal Care Company (NYSE:EPC) is the most popular stock in this table. On the other hand Tyler Technologies, Inc. (NYSE:TYL) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks FireEye Inc (NASDAQ:FEYE) is more popular among hedge funds, although its investors tend to be slightly more cautious. Considering that hedge funds are fond of this stock, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
