Is Sportsman’s Warehouse Holdings Inc (SPWH) Going to Burn These Hedge Funds?

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.

Sportsman’s Warehouse Holdings Inc (NASDAQ:SPWH) investors should pay attention to an increase in activity from the world’s largest hedge funds in recent months. SPWH was in 15 hedge funds’ portfolios at the end of September. There were 13 hedge funds in our database with SPWH positions at the end of the previous quarter. At the end of this article we will also compare SPWH to other stocks including Heritage Commerce Corp. (NASDAQ:HTBK), San Juan Basin Royalty Trust (NYSE:SJT), and Boingo Wireless Inc (NASDAQ:WIFI) to get a better sense of its popularity.

Follow Sportsman's Warehouse Holdings Inc. (NASDAQ:SPWH)

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.

Daxiao Productions/

Daxiao Productions/

What does the smart money think about Sportsman’s Warehouse Holdings Inc (NASDAQ:SPWH)?

At Q3’s end, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a rise of 15% from one quarter earlier. By comparison, 13 hedge funds held shares or bullish call options in SPWH heading into this year. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Jamie Mendola’s Pacific Grove Capital has the biggest position in Sportsman’s Warehouse Holdings Inc (NASDAQ:SPWH), worth close to $8.2 million, amounting to 3.1% of its total 13F portfolio. The second most bullish fund manager is Steve Cohen of Point72 Asset Management, with a $7.9 million position. Some other members of the smart money with similar optimism contain Israel Englander’s Millennium Management, and Anand Parekh’s Alyeska Investment Group. 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.