Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: Hemisphere Media Group Inc (NASDAQ:HMTV) .
Hemisphere Media Group Inc (NASDAQ:HMTV) has seen a decrease in hedge fund sentiment of late. There were 10 hedge funds in our database with HMTV holdings at the end of the previous quarter. At the end of this article we will also compare HMTV to other stocks including Bryn Mawr Bank Corp. (NASDAQ:BMTC), Triple-S Management Corp.(NYSE:GTS), and Bellicum Pharmaceuticals Inc (NASDAQ:BLCM) 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 check out the key action surrounding Hemisphere Media Group Inc (NASDAQ:HMTV).
What does the smart money think about Hemisphere Media Group Inc (NASDAQ:HMTV)?
Heading into the fourth quarter of 2016, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -10% from the second quarter of 2016. By comparison, 7 hedge funds held shares or bullish call options in HMTV heading into this year. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Debra Fine’s Fine Capital Partners has the largest position in Hemisphere Media Group Inc (NASDAQ:HMTV), worth close to $19.2 million, amounting to 2% of its total 13F portfolio. Coming in second is Luxor Capital Group, led by Christian Leone, holding a $15.6 million position; 0.4% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors that are bullish consist of David Atterbury’s Whetstone Capital Advisors, Jonathan Lennon’s Pleasant Lake Partners and Jim Simons’s Renaissance Technologies, one of the biggest hedge funds in the world. We should note that Whetstone Capital Advisors 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 Hemisphere Media Group Inc (NASDAQ:HMTV) has sustained declining sentiment from the aggregate hedge fund industry, it’s easy to see that there were a few hedgies that elected to cut their positions entirely last quarter. At the top of the heap, David Atterbury’s Whetstone Capital Advisors cashed in the largest position of all the hedgies studied by Insider Monkey, valued at about $7.8 million in call options, and Jonathan Soros’s JS Capital was right behind this move, as the fund dumped about $0.7 million worth of shares.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Hemisphere Media Group Inc (NASDAQ:HMTV) but similarly valued. We will take a look at Bryn Mawr Bank Corp. (NASDAQ:BMTC), Triple-S Management Corp.(NYSE:GTS), Bellicum Pharmaceuticals Inc (NASDAQ:BLCM), and Heritage Financial Corporation (NASDAQ:HFWA). This group of stocks’ market valuations are closest to HMTV’s market valuation.
|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 9 hedge funds with bullish positions and the average amount invested in these stocks was $65 million. That figure was $57 million in HMTV’s case. Heritage Financial Corporation (NASDAQ:HFWA) is the most popular stock in this table. On the other hand Bellicum Pharmaceuticals Inc (NASDAQ:BLCM) is the least popular one with only 3 bullish hedge fund positions. Hemisphere Media Group Inc (NASDAQ:HMTV) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard HFWA might be a better candidate to consider taking a long position in.