You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.
Belmond Ltd (NYSE:BEL) was in 12 hedge funds’ portfolios at the end of September. BEL has experienced a decrease in hedge fund interest recently. There were 15 hedge funds in our database with BEL holdings at the end of the previous quarter. At the end of this article we will also compare BEL to other stocks including WNS (Holdings) Limited (ADR) (NYSE:WNS), TriNet Group Inc (NYSE:TNET), and Simmons First National Corporation (NASDAQ:SFNC) 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.
Keeping this in mind, let’s review the new action encompassing Belmond Ltd (NYSE:BEL).
How have hedgies been trading Belmond Ltd (NYSE:BEL)?
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 drop of 20% from one quarter earlier. By comparison, 19 hedge funds held shares or bullish call options in BEL heading into this year. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Robert Joseph Caruso’s Select Equity Group has the most valuable position in Belmond Ltd (NYSE:BEL), worth close to $39 million, accounting for 0.3% of its total 13F portfolio. The second largest stake is held by Cove Street Capital, led by Jeffrey Bronchick, with a $26.1 million position; the fund has 2.8% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that are bullish encompass Chuck Royce’s Royce & Associates, Mario Gabelli’s GAMCO Investors and Robert Bishop’s Impala Asset Management. We should note that Impala Asset Management 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.
Since Belmond Ltd (NYSE:BEL) has experienced declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there is a sect of funds that elected to cut their full holdings last quarter. It’s worth mentioning that David Steinberg and Eric Udoff’s Marlowe Partners dumped the largest stake of the “upper crust” of funds tracked by Insider Monkey, valued at about $1.1 million in stock. John Overdeck and David Siegel’s fund, Two Sigma Advisors, also cut its stock, about $1.1 million worth of BEL shares.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Belmond Ltd (NYSE:BEL) but similarly valued. We will take a look at WNS (Holdings) Limited (ADR) (NYSE:WNS), TriNet Group Inc (NYSE:TNET), Simmons First National Corporation (NASDAQ:SFNC), and New York REIT Inc (NYSE:NYRT). This group of stocks’ market caps are similar to BEL’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 12 hedge funds with bullish positions and the average amount invested in these stocks was $82 million. That figure was $103 million in BEL’s case. New York REIT Inc (NYSE:NYRT) is the most popular stock in this table. On the other hand Simmons First National Corporation (NASDAQ:SFNC) is the least popular one with only 6 bullish hedge fund positions. Belmond Ltd (NYSE:BEL) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard NYRT might be a better candidate to consider taking a long position in.