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.
One of the stocks that saw an increase in popularity among smart money investors tracked by Insider Monkey is ANI Pharmaceuticals Inc (NASDAQ:ANIP). At the end of September, the company was included in the equity portfolios of 16 funds, compared to 14 funds a quarter earlier. At the end of this article we will also compare ANIP to other stocks including Diamond Hill Investment Group, Inc. (NASDAQ:DHIL), Marten Transport, Ltd (NASDAQ:MRTN), and Meritor Inc (NYSE:MTOR) 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 have hedge funds been doing with ANI Pharmaceuticals Inc (NASDAQ:ANIP)?
As mentioned earlier, at the end of the third quarter, a total of 16 funds tracked by Insider Monkey were bullish on ANI Pharmaceuticals, which represents a gain of 14% from the second quarter of 2016. The graph below displays the number of hedge funds with bullish position in ANIP over the last five quarters. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Mitchell Blutt’s Consonance Capital Management has the biggest position in ANI Pharmaceuticals Inc (NASDAQ:ANIP), worth close to $43.3 million, corresponding to 4.2% of its total 13F portfolio. On Consonance Capital Management’s heels is Jim Simons’ Renaissance Technologies, with a $12.7 million position. Other hedge funds and institutional investors with similar optimism comprise Robert B. Gillam’s McKinley Capital Management and Martin Whitman’s Third Avenue Management. 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-microcap stocks.