Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts, usually don’t make them change their opinion towards a company. This time it may be different. During the fourth quarter of 2018 we observed increased volatility and small-cap stocks underperformed the market. Things completely reversed during the first half of 2019. Hedge fund investor letters indicated that they are cutting their overall exposure, closing out some position and doubling down on others. Let’s take a look at the hedge fund sentiment towards International Speedway Corporation (NASDAQ:ISCA) to find out whether it was one of their high conviction long-term ideas.
Is International Speedway Corporation (NASDAQ:ISCA) worth your attention right now? The smart money is in a bearish mood. The number of long hedge fund bets went down by 5 lately. Our calculations also showed that ISCA isn’t among the 30 most popular stocks among hedge funds (see the video below). ISCA was in 14 hedge funds’ portfolios at the end of the second quarter of 2019. There were 19 hedge funds in our database with ISCA positions at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
According to most stock holders, hedge funds are assumed to be worthless, old investment tools of years past. While there are over 8000 funds trading at present, We choose to focus on the bigwigs of this club, about 750 funds. These hedge fund managers direct the lion’s share of the smart money’s total capital, and by tailing their inimitable stock picks, Insider Monkey has come up with several investment strategies that have historically outstripped the broader indices. Insider Monkey’s flagship hedge fund strategy exceeded the S&P 500 index by around 5 percentage points a year since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to take a gander at the fresh hedge fund action encompassing International Speedway Corporation (NASDAQ:ISCA).
Hedge fund activity in International Speedway Corporation (NASDAQ:ISCA)
At the end of the second quarter, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -26% from the first quarter of 2019. On the other hand, there were a total of 19 hedge funds with a bullish position in ISCA a year ago. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in International Speedway Corporation (NASDAQ:ISCA), which was worth $64.7 million at the end of the second quarter. On the second spot was Elliott Management which amassed $52.8 million worth of shares. Moreover, GLG Partners, Water Island Capital, and Oasis Management were also bullish on International Speedway Corporation (NASDAQ:ISCA), allocating a large percentage of their portfolios to this stock.
Judging by the fact that International Speedway Corporation (NASDAQ:ISCA) has witnessed falling interest from the smart money, we can see that there were a few hedge funds who were dropping their full holdings last quarter. Interestingly, Benjamin Pass’s TOMS Capital cut the largest stake of all the hedgies followed by Insider Monkey, valued at about $18 million in stock. Joseph Samuels’s fund, Islet Management, also dumped its stock, about $7.2 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 5 funds last quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as International Speedway Corporation (NASDAQ:ISCA) but similarly valued. These stocks are Meritor Inc (NYSE:MTOR), Denali Therapeutics Inc. (NASDAQ:DNLI), BrightView Holdings, Inc. (NYSE:BV), and Oceaneering International, Inc. (NYSE:OII). This group of stocks’ market values resemble ISCA’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MTOR | 23 | 329539 | 5 |
| DNLI | 9 | 20646 | -1 |
| BV | 8 | 304619 | -1 |
| OII | 15 | 230924 | -6 |
| Average | 13.75 | 221432 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $221 million. That figure was $170 million in ISCA’s case. Meritor Inc (NYSE:MTOR) is the most popular stock in this table. On the other hand BrightView Holdings, Inc. (NYSE:BV) is the least popular one with only 8 bullish hedge fund positions. International Speedway Corporation (NASDAQ:ISCA) 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately ISCA wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on ISCA were disappointed as the stock returned 0.3% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.
