Reputable billionaire investors such as Nelson Peltz and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won’t accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.
Is Regulus Therapeutics Inc (NASDAQ:RGLS) a healthy stock for your portfolio? Investors who are in the know are genuinely betting on it. The number of long hedge fund positions that are disclosed in regulatory 13F filings went up by 4 recently. RGLS was in 9 hedge funds’ portfolios at the end of the third quarter of 2016. There were 5 hedge funds in our database with RGLS positions at the end of the second quarter. At the end of this article we will also compare RGLS to other stocks including Northern Oil & Gas, Inc. (NYSEAMEX:NOG), JAKKS Pacific, Inc. (NASDAQ:JAKK), and VirnetX Holding Corporation (NYSEAMEX:VHC) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
What does the smart money think about Regulus Therapeutics Inc (NASDAQ:RGLS)?
At the end of the third quarter, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, an 80% jump from one quarter earlier, which did however follow a huge decline in Q2. The graph below displays the number of hedge funds with bullish positions in RGLS over the last 5 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Sabby Capital, led by Hal Mintz, holds the most valuable position in Regulus Therapeutics Inc (NASDAQ:RGLS). Sabby Capital has a $3.6 million call position in the stock. On Sabby Capital’s heels is Renaissance Technologies, one of the largest hedge funds in the world, which holds a $2.1 million position. Other hedge funds and institutional investors with similar optimism include Nathan Fischel’s DAFNA Capital Management, Glenn Russell Dubin’s Highbridge Capital Management, and Paul Orlin and Alex Porter’s Amici Capital. 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.