There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other successful funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze Brady Corp (NYSE:BRC).
Brady Corp (NYSE:BRC) was in 18 hedge funds’ portfolios at the end of September. BRC has seen an increase in support from the world’s most successful money managers recently. There were 16 hedge funds in our database with BRC positions at the end of the previous 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 VeriFone Systems Inc (NYSE:PAY), Wix.Com Ltd (NASDAQ:WIX), and Theravance Biopharma Inc (NASDAQ:TBPH) to gather more data points.
We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.
What have hedge funds been doing with Brady Corp (NYSE:BRC)?
Heading into the fourth quarter of 2016, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a gain of 13% from the previous quarter. The graph below displays the number of hedge funds with bullish position in BRC over the last 5 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, John W. Rogers’ Ariel Investments has the number one position in Brady Corp (NYSE:BRC), worth close to $129.2 million, accounting for 1.6% of its total 13F portfolio. The second largest stake is held by Jim Simons’ Renaissance Technologies holding a $44.6 million position. Some other peers that are bullish include Israel Englander’s Millennium Management, D. E. Shaw’s D E Shaw 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.