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Aeropostale, Inc. (NYSE:ARO) investors should be aware of a decrease in hedge fund interest lately. Investors who are in the know will not be surprised with a bearish hedge fund outlook, as the shares of Aeropostale, Inc. (NYSE:ARO) lost 61.73% value during the third quarter. In order to understand more about the hedge fund sentiment, we will cover hedge funds that held positions in Aeropostale, Inc. (NYSE:ARO), at the end of the previous quarter.
At the end of this article, we will also compare Aeropostale, Inc. (NYSE:ARO) to other stocks, including Cosi Inc (NASDAQ:COSI), CHC Group Ltd (NYSE:HELI), and Eleven Biotherapeutics Inc (NASDAQ:EBIO) to get a better sense of its popularity.
At the moment there are numerous tools investors can use to value publicly traded companies. A duo of the less utilized tools are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the best picks of the top hedge fund managers can beat the broader indices by a significant amount (see the details here).
Keeping this in mind, we’re going to take a look at the key action regarding Aeropostale, Inc. (NYSE:ARO).
What have hedge funds been doing with Aeropostale, Inc. (NYSE:ARO)?
At the end of the third quarter, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a decrease of 40% from the second quarter. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Matt Sirovich and Jeremy Mindich’s Scopia Capital has the biggest position in Aeropostale, Inc. (NYSE:ARO), worth close to $6.1 million, corresponding to 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Elm Ridge Capital, managed by Ron Gutfleish, which holds a $2 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that are bullish contain Renaissance Technologies, and Israel Englander’s Millennium Management.
Judging by the fact that Aeropostale, Inc. (NYSE:ARO) has experienced a bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there is a sect of hedge funds that elected to cut their entire stakes heading into Q4. Intriguingly, Nathaniel August’s Mangrove Partners dropped the biggest stake of the 700 funds watched by Insider Monkey, totaling about $2.3 million in stock. Soros Fund Management, also dropped its stock, about $0.3 million worth of shares . These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 6 funds heading into Q4.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Aeropostale, Inc. (NYSE:ARO) but similarly valued. We will take a look at Cosi Inc (NASDAQ:COSI), CHC Group Ltd (NYSE:HELI), Eleven Biotherapeutics Inc (NASDAQ:EBIO), and Zosano Pharma Corp (NASDAQ:ZSAN). All of these stock market caps are similar to Aeropostale, Inc. (NYSE:ARO)’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see, these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $4 million. That figure was $12 million in Aeropostale, Inc. (NYSE:ARO)’s case. CHC Group Ltd (NYSE:HELI) is the most popular stock in this table. On the other hand, Cosi Inc (NASDAQ:COSI) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks, Aeropostale, Inc. (NYSE:ARO) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.