Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
Altisource Portfolio Solutions S.A. (NASDAQ:ASPS) was in 12 hedge funds’ portfolios at the end of September. ASPS investors should pay attention to a decrease in enthusiasm from smart money recently. There were 14 hedge funds in our database with ASPS holdings at the end of the previous quarter. At the end of this article we will also compare ASPS to other stocks including NMI Holdings Inc (NASDAQ:NMIH), Trevena Inc (NASDAQ:TRVN), and Sabine Royalty Trust (NYSE:SBR) to get a better sense of its popularity.
In the financial world there is a multitude of methods shareholders can use to assess publicly traded companies. Some of the most under-the-radar methods are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best hedge fund managers can outperform the broader indices by a very impressive amount (see the details here).
Keeping this in mind, let’s take a glance at the fresh action encompassing Altisource Portfolio Solutions S.A. (NASDAQ:ASPS).
Hedge fund activity in Altisource Portfolio Solutions S.A. (NASDAQ:ASPS)
At the end of the third quarter, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -14% from one quarter earlier. With the smart money’s sentiment swirling, there exist a few key hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Christian Leone’s Luxor Capital Group has the biggest position in Altisource Portfolio Solutions S.A. (NASDAQ:ASPS), worth close to $44.5 million, accounting for 1% of its total 13F portfolio. Sitting at the No. 2 spot is Omega Advisors, managed by Leon Cooperman, which holds an $36.1 million position; 0.7% of its 13F portfolio is allocated to the company. Remaining professional money managers that are bullish include Michael Hintze’s CQS Cayman LP, Andy Redleaf’s Whitebox Advisors and Ken Griffin’s Citadel Investment Group.
Seeing as Altisource Portfolio Solutions S.A. (NASDAQ:ASPS) has faced declining sentiment from the entirety of the hedge funds we track, logic holds that there were a few hedgies that slashed their positions entirely in the third quarter. Intriguingly, Jamie Zimmerman’s Litespeed Management dumped the largest stake of all the hedgies tracked by Insider Monkey, comprising close to $45.4 million in stock. Robert Pohly’s fund, Samlyn Capital, also cut its stock, about $6.6 million worth. These transactions are important to note, as total hedge fund interest fell by 2 funds in the third quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Altisource Portfolio Solutions S.A. (NASDAQ:ASPS) but similarly valued. We will take a look at NMI Holdings Inc (NASDAQ:NMIH), Trevena Inc (NASDAQ:TRVN), Sabine Royalty Trust (NYSE:SBR), and Neuroderm Ltd (NASDAQ:NDRM). All of these stocks’ market caps match ASPS’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $114 million. That figure was $108 million in ASPS’s case. The least popular stock in this table is Sabine Royalty Trust (NYSE:SBR), while the most popular one is NMI Holdings Inc (NASDAQ:NMIH)). In comparison, Altisource Portfolio Solutions S.A. (NASDAQ:ASPS) with 12 bullish hedge fund positions is not the least, nor the most popular stock in this group, and the hedge fund interest is below average. This may be a sign that is not a good choice for investment, and we’d rather spend our time researching stocks that hedge funds are piling on. For those alternatives, you can consider NMIH and TRVN in this particular group.