At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.
Wesco Aircraft Holdings Inc (NYSE:WAIR) was in 12 hedge funds’ portfolios at the end of the third quarter of 2016. WAIR has experienced a decrease in enthusiasm from smart money lately. There were 12 hedge funds in our database with WAIR holdings at the end of September. 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 Central Garden & Pet Co (NASDAQ:CENT), Hollysys Automation Technologies Ltd (NASDAQ:HOLI), and WMS Industries Inc. (NYSE:WMS) 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, we’re going to take a look at the key action surrounding Wesco Aircraft Holdings Inc (NYSE:WAIR).
How are hedge funds trading Wesco Aircraft Holdings Inc (NYSE:WAIR)?
At Q3’s end, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a drop of 8% from the previous quarter. On the other hand, there were a total of 17 hedge funds with a bullish position in WAIR at the beginning of this year. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Makaira Partners, led by Thomas Bancroft, holds the most valuable position in Wesco Aircraft Holdings Inc (NYSE:WAIR). According to regulatory filings, the fund has a $109.8 million position in the stock, comprising 16.6% of its 13F portfolio. Coming in second is MSD Capital, led by Glenn Fuhrman and John Phelan, which holds a $71.3 million position; the fund has 17.7% of its 13F portfolio invested in the stock. Some other professional money managers that are bullish encompass Wallace Weitz’s Wallace R. Weitz & Co., Chuck Royce’s Royce & Associates and Jeffrey Bronchick’s Cove Street Capital. We should note that Makaira Partners is 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.