Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
In this article we are going to take a look what hedge funds think about Inventure Foods Inc (NASDAQ:SNAK). Overall, the stock registered an increase in popularity as the number of funds from our database long the stock went up by two. 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 Hurco Companies, Inc. (NASDAQ:HURC), Advent Claymore Convertible Securities and Income Fund of Beneficial Interest (NYSE:AGC), and Pendrell Corporation – Class A (NASDAQ:PCO) to gather more data points.
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We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.
With all of this in mind, let’s take a glance at the fresh action encompassing Inventure Foods Inc (NASDAQ:SNAK).
Hedge fund activity in Inventure Foods Inc (NASDAQ:SNAK)
At the end of the third quarter, a total of seven of the hedge funds tracked by Insider Monkey were long this stock, up by 40% from one quarter earlier. By comparison, six funds held shares or bullish call options in SNAK heading into this year. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Alyeska Investment Group, led by Anand Parekh, holds the largest position in Inventure Foods Inc (NASDAQ:SNAK). Alyeska Investment Group has a $9.1 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Chuck Royce’s Royce & Associates, with a $7.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors with similar optimism contain Mario Gabelli’s GAMCO Investors and John Zaro’s Bourgeon Capital. 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.
Consequently, specific money managers have jumped into Inventure Foods Inc (NASDAQ:SNAK) headfirst. PEAK6 Capital Management, led by Matthew Hulsizer, created the most outsized call position in Inventure Foods Inc (NASDAQ:SNAK). PEAK6 Capital Management had $1.2 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also initiated a $0.2 million position during the quarter.
Let’s now review hedge fund activity in other stocks similar to Inventure Foods Inc (NASDAQ:SNAK). We will take a look at Hurco Companies, Inc. (NASDAQ:HURC), Advent Claymore Convertible Securities and Income Fund of Beneficial Interest (NYSE:AGC), Pendrell Corporation – Class A (NASDAQ:PCO), and FreightCar America, Inc. (NASDAQ:RAIL). This group of stocks’ market valuations resemble SNAK’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 seven funds with bullish positions and the average amount invested in these stocks was $31 million. That figure was $19 million in SNAK’s case. FreightCar America, Inc. (NASDAQ:RAIL) is the most popular stock in this table. On the other hand Advent Claymore Convertible Securities and Income Fund of Beneficial Interest (NYSE:AGC) is the least popular one with only four bullish hedge fund positions. Inventure Foods Inc (NASDAQ:SNAK) is not the least popular stock in this group, but hedge fund interest is close to 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 RAIL might be a better candidate to consider taking a long position in.