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.
Equity Commonwealth (NYSE:EQC) shareholders have witnessed a decrease in support from the world’s most elite money managers of late. EQC was in 25 hedge funds’ portfolios at the end of September. There were 26 hedge funds in our database with EQC holdings 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 Chicago Bridge & Iron Company N.V. (NYSE:CBI), Tableau Software Inc (NYSE:DATA), and Synovus Financial Corp. (NYSE:SNV) 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.
Keeping this in mind, we’re going to view the fresh action surrounding Equity Commonwealth (NYSE:EQC).
What have hedge funds been doing with Equity Commonwealth (NYSE:EQC)?
At the end of the third quarter, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a fall of 4% from one quarter earlier. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Governors Lane, managed by Isaac Corre, holds the most valuable position in Equity Commonwealth (NYSE:EQC). Governors Lane has a $58.6 million position in the stock, comprising 5.2% of its 13F portfolio. On Governors Lane’s heels is Renaissance Technologies, led by Jim Simons, holding a $55.9 million position. Other hedge funds and institutional investors with similar optimism contain D. E. Shaw’s D E Shaw, Michael Kaine’s Numina Capital and David Thomas’ Atalan Capital.