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.
Cabot Microelectronics Corporation (NASDAQ:CCMP) has experienced an increase in enthusiasm from smart money lately. There were 15 hedge funds in our database with CCMP positions at the end of the 2016 third quarter. At the end of this article we will also compare CCMP to other stocks including Consolidated Communications Holdings Inc (NASDAQ:CNSL), Builders FirstSource, Inc. (NASDAQ:BLDR), and TopBuild Corp (NYSE:BLD) 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 take a peek at the fresh action surrounding Cabot Microelectronics Corporation (NASDAQ:CCMP).
How are hedge funds trading Cabot Microelectronics Corporation (NASDAQ:CCMP)?
At Q3’s end, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a boost of 67% from the second quarter of 2016. The graph below displays the number of hedge funds with bullish position in CCMP over the last 5 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Chuck Royce’s Royce & Associates has the number one position in Cabot Microelectronics Corporation (NASDAQ:CCMP), worth close to $49.7 million. Sitting at the No. 2 spot is Douglas Braunstein and James Wooleryá of Hudson Executive Capital, with a $31 million position; the fund has 5.6% of its 13F portfolio invested in the stock. Remaining peers that hold long positions include Hudson Executive Capital, Jim Simons’ Renaissance Technologies and Phill Gross and Robert Atchinson’s Adage Capital 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.