We have been waiting for this for a year and finally the third quarter ended up showing a nice bump in the performance of small-cap stocks. Both the S&P 500 and Russell 2000 were up since the end of the second quarter, but small-cap stocks outperformed the large-cap stocks by double digits. This is important for hedge funds, which are big supporters of small-cap stocks, because their investors started pulling some of their capital out due to poor recent performance. It is very likely that equity hedge funds will deliver better risk adjusted returns in the second half of this year. In this article we are going to look at how this recent market trend affected the sentiment of hedge funds towards J Alexanders Holdings Inc (NYSE:JAX), and what that likely means for the prospects of the company and its stock.
J Alexanders Holdings Inc (NYSE:JAX) was in 14 hedge funds’ portfolios at the end of the third quarter of 2016. JAX investors should be aware of a decrease in support from the world’s most successful money managers recently. There were 15 hedge funds in our database with JAX positions at the end of the previous quarter. At the end of this article we will also compare JAX to other stocks including Kopin Corporation (NASDAQ:KOPN), Zagg Inc (NASDAQ:ZAGG), and Cutera, Inc. (NASDAQ:CUTR) to get a better sense of its popularity.
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What have hedge funds been doing with J Alexanders Holdings Inc (NYSE:JAX)?
At the end of the third quarter, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 7% drop from one quarter earlier. By comparison, 15 hedge funds held shares or bullish call options in JAX heading into this year, while 18 held those positions at the end of Q3 2015. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Ricky Sandler’s Eminence Capital has the biggest position in J Alexanders Holdings Inc (NYSE:JAX), worth close to $13 million. The second largest stake is held by Mario Cibelli of Marathon Partners, with a $7.3 million position; 3.6% of its 13F portfolio is allocated to the company. Other members of the smart money that hold long positions consist of Terence Hogan’s Addison Clark Management, Seth Rosen’s Nitorum Capital, and Michael M. Rothenberg’s Moab Capital Partners. We should note that two of these hedge funds (Nitorum Capital and Moab Capital Partners) 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.