Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those successful funds in these small-cap stocks. In the following paragraphs, we analyze International Speedway Corp (NASDAQ:ISCA) from the perspective of those successful funds.
International Speedway Corp (NASDAQ:ISCA) shares didn’t see a lot of action during the third quarter. Overall, hedge fund sentiment was flat. The stock was in 18 hedge funds’ portfolios at the end of the third quarter of 2016. At the end of this article we will also compare ISCA to other stocks including Premier Inc (NASDAQ:PINC), Depomed Inc (NASDAQ:DEPO), and AMN Healthcare Services, Inc. (NYSE:AHS) to get a better sense of its popularity.
We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.
Keeping this in mind, let’s review the key action surrounding International Speedway Corp (NASDAQ:ISCA).
Hedge fund activity in International Speedway Corp (NASDAQ:ISCA)
At Q3’s end, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, unchanged from one quarter earlier. By comparison, 14 hedge funds held shares or bullish call options in ISCA heading into this year. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, John W. Rogers’s Ariel Investments has the biggest position in International Speedway Corp (NASDAQ:ISCA), worth close to $128.3 million, amounting to 1.6% of its total 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, one of the largest hedge funds in the world, holding a $15.3 million position; less than 0.1% of its 13F portfolio is allocated to the company. Remaining peers with similar optimism contain D. E. Shaw’s D E Shaw, Peter S. Park’s Park West Asset Management and Jack Ripsteen’s Potrero Capital Research. We should note that Potrero Capital Research 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.