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.
Is Health Insurance Innovations Inc (NASDAQ:HIIQ) the right pick for your portfolio? Prominent investors are unambiguously in an optimistic mood. The number of bullish hedge fund positions grew by 1 recently. HIIQ was in 6 hedge funds’ portfolios at the end of September. There were 5 hedge funds in our database with HIIQ positions at the end of June. At the end of this article we will also compare HIIQ to other stocks including Infinity Pharmaceuticals Inc. (NASDAQ:INFI), SAExploration Holdings, Inc. (NASDAQ:SAEX), and Sunshine Bancorp Inc (NASDAQ:SBCP) to get a better sense of its popularity.
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What have hedge funds been doing with Health Insurance Innovations Inc (NASDAQ:HIIQ)?
At the end of the third quarter, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, a gain of 20% from the second quarter of 2016. Of the funds tracked by Insider Monkey, J. Carlo Cannell’s Cannell Capital has the number one position in Health Insurance Innovations Inc (NASDAQ:HIIQ), worth close to $6.2 million, corresponding to 2.5% of its total 13F portfolio. Coming in second is Joe Huber of Huber Capital Management, with a $3.8 million position. Some other members of the smart money that hold long positions include Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital, Millennium Management, one of the largest hedge funds in the world, and Peter Muller’s PDT Partners. 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-micro-cap stocks.
As industry-wide interest jumped, some big names have been driving this bullishness. Millennium Management, founded by Israel Englander, assembled the most outsized position in Health Insurance Innovations Inc (NASDAQ:HIIQ). Millennium Management had $0.2 million invested in the company at the end of the third quarter.
Let’s go over hedge fund activity in other stocks similar to Health Insurance Innovations Inc (NASDAQ:HIIQ). We will take a look at Infinity Pharmaceuticals Inc. (NASDAQ:INFI), SAExploration Holdings, Inc. (NASDAQ:SAEX), Sunshine Bancorp Inc (NASDAQ:SBCP), and Computer Task Group, Inc. (NASDAQ:CTG). This group of stocks’ market caps are similar to HIIQ’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| INFI | 15 | 21975 | 0 |
| SAEX | 6 | 43568 | 1 |
| SBCP | 6 | 13812 | 1 |
| CTG | 5 | 12226 | 0 |
As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $23 million. That figure was $11 million in HIIQ’s case. Infinity Pharmaceuticals Inc. (NASDAQ:INFI) is the most popular stock in this table. On the other hand Computer Task Group, Inc. (NASDAQ:CTG) is the least popular one with only 5 bullish hedge fund positions. Health Insurance Innovations Inc (NASDAQ:HIIQ) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard INFI might be a better candidate to consider taking a long position in.
Disclosure: None
