Hedge funds run by legendary names like Nelson Peltz and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources on analyzing and uncovering data about small-cap stocks that the big brokerage houses don’t follow. Small caps are where they can generate significant out-performance. These stocks have been on a tear since the end of June, outperforming large-cap index funds by more than 10 percentage points. That’s why we pay special attention to hedge fund activity in these stocks.
Barnes & Noble Education Inc (NYSE:BNED) was in 14 hedge funds’ portfolios at the end of September. BNED investors should be aware of a decrease in hedge fund sentiment in recent months. There were 16 hedge funds in our database with BNED positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Albany Molecular Research, Inc. (NASDAQ:AMRI), Greenhill & Co., Inc. (NYSE:GHL), and Rudolph Technologies Inc (NYSE:RTEC) to gather more data points.
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 Barnes & Noble Education Inc (NYSE:BNED)?
At Q3’s end, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a drop of 13% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards BNED over the last 5 quarters, which has generally trended down throughout that time. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Abrams Capital Management, led by David Abrams, holds the largest position in Barnes & Noble Education Inc (NYSE:BNED). Abrams Capital Management has an $83.9 million position in the stock, comprising 4.2% of its 13F portfolio. Sitting at the No. 2 spot is Israel Englander’s Millennium Management, with a $2.5 million position. Some other hedge funds and institutional investors with similar optimism consist of Terence Hogan’s Addison Clark Management, David E. Shaw’s D E Shaw, and Jeffrey Gendell’s Tontine Asset 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.