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 SP Plus Corp (NASDAQ:SP) a buy, sell, or hold? Hedge funds are categorically getting more bullish. The number of bullish hedge fund positions swelled by 2 lately. SP was in 10 hedge funds’ portfolios at the end of September. There were 8 hedge funds in our database with SP positions at the end of the previous quarter. At the end of this article we will also compare SP to other stocks including K12 Inc. (NYSE:LRN), Kforce Inc. (NASDAQ:KFRC), and Kadant Inc. (NYSE:KAI) 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 SP Plus Corp (NASDAQ:SP)?
Heading into the fourth quarter of 2016, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, up by 25% from one quarter earlier. By comparison, 10 hedge funds held shares or bullish call options in SP heading into this year. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Leon Lowenstein of Lionstone Capital Management holds the most valuable position in SP Plus Corp (NASDAQ:SP). Lionstone Capital Management has a $20.5 million position in the stock, comprising 12.6% of its 13F portfolio. Coming in second is Renaissance Technologies, one of the largest hedge funds in the world; with a $5.2 million position. Other hedge funds and institutional investors with similar optimism contain Martin Whitman’s Third Avenue Management, Paul Hondros’ AlphaOne Capital Partners and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet 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.