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.
Planet Payment Inc (NASDAQ:PLPM) investors should be aware of a decrease in hedge fund interest recently. PLPM was in 10 hedge funds’ portfolios at the end of the third quarter of 2016. There were 11 hedge funds in our database with PLPM 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 Graham Corporation (NYSEAMEX:GHM), Veritex Holdings Inc (NASDAQ:VBTX), and Alliance One International, Inc. (NYSE:AOI) 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.
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Keeping this in mind, let’s take a peek at the latest action encompassing Planet Payment Inc (NASDAQ:PLPM).
How are hedge funds trading Planet Payment Inc (NASDAQ:PLPM)?
At the end of the third quarter, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -9% from one quarter earlier. By comparison, 6 hedge funds held shares or bullish call options in PLPM heading into this year. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Renaissance Technologies, one of the largest hedge funds in the world, holds the most valuable position in Planet Payment Inc (NASDAQ:PLPM). Renaissance Technologies has a $3 million position in the stock. Sitting at the No. 2 spot is Robert B. Gillam of McKinley Capital Management which holds a $2.5 million position. Some other members of the smart money with similar optimism consist of Peter Algert and Kevin Coldiron’s Algert Coldiron Investors, Amy Minella’s Cardinal Capital and Peter A. Wright’s P.A.W. CAPITAL PARTNERS. 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.
Seeing as Planet Payment Inc (NASDAQ:PLPM) has faced a decline in interest from hedge fund managers, it’s easy to see that there were a few hedge funds that elected to cut their positions entirely heading into Q4. At the top of the heap, Israel Englander’s Millennium Management got rid of the biggest position of the 700 funds followed by Insider Monkey, totaling close to $0.1 million in stock, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund dropped about $0.1 million worth of shares.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Planet Payment Inc (NASDAQ:PLPM) but similarly valued. These stocks are Graham Corporation (NYSEAMEX:GHM), Veritex Holdings Inc (NASDAQ:VBTX), Alliance One International, Inc. (NYSE:AOI), and Southern Missouri Bancorp, Inc. (NASDAQ:SMBC). This group of stocks’ market caps resemble PLPM’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GHM | 8 | 22646 | 1 |
| VBTX | 6 | 26307 | -1 |
| AOI | 5 | 24899 | -2 |
| SMBC | 2 | 3732 | -1 |
As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $19 million. That figure was $12 million in PLPM’s case. Graham Corporation (NYSEAMEX:GHM) is the most popular stock in this table. On the other hand Southern Missouri Bancorp, Inc. (NASDAQ:SMBC) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Planet Payment Inc (NASDAQ:PLPM) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
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