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.
Is Meta Financial Group Inc. (NASDAQ:CASH) the right investment to pursue these days? Prominent investors seem to be getting more optimistic, as the number of long hedge fund positions inched up by one during the third quarter. In this way, 15 funds from the Insider Monkey database held shares of Meta Financial Group at the end of September. At the end of this article we will also compare CASH to other stocks including Flamel Technologies S.A. (ADR) (NASDAQ:FLML), Ladenburg Thalmann Financial Services (NYSEMKT:LTS), and Camden National Corporation (NASDAQ:CAC) 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.
How have hedgies been trading Meta Financial Group Inc. (NASDAQ:CASH)?
At the end of the third quarter, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, up by 7% over the quarter. On the other hand, there were a total of 11 hedge funds with a bullish position in CASH at the beginning of 2016. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Wilmot B. Harkey and Daniel Mack’s Nantahala Capital Management holds the most valuable position in Meta Financial Group Inc. (NASDAQ:CASH). which was worth $25.8 million at the end of September. On Nantahala Capital Management’s heels is Emanuel J. Friedman’s EJF Capital, with a $24.5 million position. Other hedge funds and institutional investors that are bullish consist of Tom Brown’s Second Curve Capital, Jim Simons’ Renaissance Technologies and Ken Grossman and Glen Schneider’s SG Capital Management. We should note that two of these hedge funds (Nantahala Capital Management and SG Capital Management) 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.
As one would reasonably expect, some big names were leading the bulls’ herd. Matthew Tewksbury’s Stevens Capital Management initiated the most valuable position in Meta Financial Group Inc. (NASDAQ:CASH). Stevens Capital Management had $0.2 million invested in the company at the end of the quarter.
Let’s also examine hedge fund activity in other stocks similar to Meta Financial Group Inc. (NASDAQ:CASH). We will take a look at Flamel Technologies S.A. (ADR) (NASDAQ:FLML), Ladenburg Thalmann Financial Services (NYSEAMEX:LTS), Camden National Corporation (NASDAQ:CAC), and Pier 1 Imports, Inc. (NYSE:PIR). This group of stocks’ market caps match CASH’s market cap.
|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 11 funds with bullish positions and the average amount invested in these stocks was $77 million. That figure was $96 million in CASH’s case. Pier 1 Imports, Inc. (NYSE:PIR) is the most popular stock in this table. On the other hand Ladenburg Thalmann Financial Services (NYSEMKT:LTS) is the least popular one with only six investors holding long positions. Meta Financial Group Inc. (NASDAQ:CASH) 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. In this regard Pier 1 Imports, Inc. (NYSE:PIR) might be a better candidate to consider taking a long position in.