Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is the small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we follow the hedge fund activity in the small-cap space.
Intersect ENT Inc (NASDAQ:XENT) investors should be aware of an increase in hedge fund interest recently. XENT was in 13 hedge funds’ portfolios at the end of the third quarter of 2016. There were 10 hedge funds in our database with XENT 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 Vicor Corp (NASDAQ:VICR), Village Super Market, Inc. (NASDAQ:VLGEA), and Sportsman’s Warehouse Holdings Inc (NASDAQ:SPWH) 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.
With all of this in mind, let’s take a peek at the key action regarding Intersect ENT Inc (NASDAQ:XENT).
Hedge fund activity in Intersect ENT Inc (NASDAQ:XENT)
Heading into the fourth quarter of 2016, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, a jump of 30% from the second quarter of 2016. The graph below displays the number of hedge funds with bullish position in XENT over the last 5 quarters. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Israel Englander’s Millennium Management holds the biggest position in Intersect ENT Inc (NASDAQ:XENT). According to regulatory filings, the fund has a $12.2 million position in the stock, comprising less than 0.1% of its 13F portfolio. On Millennium Management’s heels is Broadfin Capital, led by Kevin Kotler, which holds a $10.1 million position; 0.9% of its 13F portfolio is allocated to the company. Other members of the smart money that hold long positions comprise Chuck Royce’s Royce & Associates, Steve Cohen’s Point72 Asset Management and Phill Gross and Robert Atchinson’s Adage 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.