Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is the small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we follow the hedge fund activity in the small-cap space.
Solaredge Technologies Inc (NASDAQ:SEDG) shares didn’t see a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 12 hedge funds’ portfolios at the end of the third quarter of 2016. At the end of this article we will also compare SEDG to other stocks including The Providence Service Corporation (NASDAQ:PRSC), A10 Networks Inc (NYSE:ATEN), and Ehi Car Services Ltd (ADR) (NYSE:EHIC) 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, we’re going to take a glance at the new action regarding Solaredge Technologies Inc (NASDAQ:SEDG).
Hedge fund activity in Solaredge Technologies Inc (NASDAQ:SEDG)
At the end of the third quarter, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards SEDG over the last 5 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Crispin Odey’s Odey Asset Management Group has the biggest position in Solaredge Technologies Inc (NASDAQ:SEDG), worth close to $57.6 million, amounting to 4.2% of its total 13F portfolio. The second most bullish fund manager is Rima Senvest Management, led by Richard Mashaal, holding a $34 million position; 2.4% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors that hold long positions contain David Halpert’s Prince Street Capital Management, Anand Parekh’s Alyeska Investment Group and Millennium Management, one of the 10 largest hedge funds in the world. 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.
Because Solaredge Technologies Inc (NASDAQ:SEDG) has sustained declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there was a specific group of money managers who were dropping their entire stakes by the end of the third quarter. Interestingly, Philip Hempleman’s Ardsley Partners said goodbye to the biggest investment of the 700 funds tracked by Insider Monkey, worth about $4.4 million in stock. William Charters and Mario Marcon’s fund, Sabal Capital Management, also cut its stock, about $4.3 million worth.
Let’s also examine hedge fund activity in other stocks similar to Solaredge Technologies Inc (NASDAQ:SEDG). We will take a look at The Providence Service Corporation (NASDAQ:PRSC), A10 Networks Inc (NYSE:ATEN), Ehi Car Services Ltd (ADR) (NYSE:EHIC), and Photronics, Inc. (NASDAQ:PLAB). This group of stocks’ market values are similar to SEDG’s market value.
|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 11.5 hedge funds with bullish positions and the average amount invested in these stocks was $105 million. That figure was $135 million in SEDG’s case. A10 Networks Inc (NYSE:ATEN) is the most popular stock in this table. On the other hand Ehi Car Services Ltd (ADR) (NYSE:EHIC) is the least popular one with only 5 bullish hedge fund positions. Solaredge Technologies Inc (NASDAQ:SEDG) 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 ATEN might be a better candidate to consider taking a long position in.