Helen of Troy Limited (HELE): 73% Surge in Smart Money Ownership; What’s Going On Here?

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.

Helen of Troy Limited (NASDAQ:HELE) investors should be aware of an increase in activity from the world’s largest hedge funds lately. 19 hedge funds that we track were long the stock on September 30. There were 11 hedge funds in our database with HELE positions at the end of the previous quarter. At the end of this article we will also compare HELE to other stocks including Carrizo Oil & Gas, Inc. (NASDAQ:CRZO), Care Capital Properties Inc (NYSE:CCP), and Virgin America Inc (NASDAQ:VA) 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.

How are hedge funds trading Helen of Troy Limited (NASDAQ:HELE)?

At the end of the third quarter, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a jump of 73% from the previous quarter. On the other hand, there were a total of 15 hedge funds with a bullish position in HELE at the beginning of this year, which fell to 11 by the year’s midpoint. So, let’s review 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, Ken Fisher of Fisher Asset Management holds the largest position in Helen of Troy Limited (NASDAQ:HELE) which has a $45.4 million position in the stock. On Fisher Asset Management’s heels is Jim Simons’ Renaissance Technologies, with a $16.8 million position. Other members of the smart money that hold long positions contain Parsa Kiai’s Steamboat Capital Partners, Ken Griffin’s Citadel Investment Group, and Cliff Asness’ AQR 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.

Consequently, key money managers were breaking ground themselves. Paul Marshall and Ian Wace of Marshall Wace LLP initiated the most outsized position in Helen of Troy Limited (NASDAQ:HELE). Marshall Wace LLP had $6.4 million invested in the company at the end of the quarter. David E. Shaw’s D E Shaw also initiated a $4 million position during the quarter. The other funds with new positions in the stock are Ken Griffin’s Citadel Investment Group, John Overdeck and David Siegel’s Two Sigma Advisors, and Michael Platt and William Reeves’ BlueCrest Capital Mgmt..

Let’s now review hedge fund activity in other stocks similar to Helen of Troy Limited (NASDAQ:HELE). These stocks are Carrizo Oil & Gas, Inc. (NASDAQ:CRZO), Care Capital Properties Inc (NYSE:CCP), Virgin America Inc (NASDAQ:VA), and Generac Holdings Inc. (NYSE:GNRC). This group of stocks’ market caps resemble HELE’s market cap.

As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $313 million. That figure was $119 million in HELE’s case. Virgin America Inc (NASDAQ:VA) is the most popular stock in this table. On the other hand Care Capital Properties Inc (NYSE:CCP) is the least popular one with only 13 bullish hedge fund positions. Helen of Troy Limited (NASDAQ:HELE) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard VA might be a better candidate to consider taking a long position in.

Disclosure: None