Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
Is Sunedison Semiconductor Ltd (NASDAQ:SEMI) going to take off soon? Investors who are in the know are undeniably getting more bullish. The number of long hedge fund bets that are revealed through the 13F filings experienced an increase of 10 recently. SEMI was in 22 hedge funds’ portfolios at the end of September. There were 12 hedge funds in our database with SEMI positions 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 MYR Group Inc (NASDAQ:MYRG), El Pollo LoCo Holdings Inc (NASDAQ:LOCO), and WMIH Corp (OTCMKTS:WMIH) 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.
What does the smart money think about Sunedison Semiconductor Ltd (NASDAQ:SEMI)?
At Q3’s end, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, up by 83% from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards SEMI over the last 5 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Robert Emil Zoellner’s Alpine Associates has the biggest position in Sunedison Semiconductor Ltd (NASDAQ:SEMI), worth close to $27.2 million, amounting to 1% of its total 13F portfolio. The second most bullish fund manager is Alec Litowitz and Ross Laser of Magnetar Capital, with a $23.3 million position. Remaining peers that are bullish include Bernard Lambilliotte’s Ecofin Ltd, Gordy Holterman and Derek Dunn’s Overland Advisors and Jim Simons’ Renaissance Technologies. 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.
Consequently, key money managers were leading the bulls’ herd. Alpine Associates created the most valuable position in Sunedison Semiconductor Ltd (NASDAQ:SEMI). The other funds with new positions in the stock are Paul Glazer’s Glazer Capital, and Nancy Havens-Hasty’s Havens Advisors.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Sunedison Semiconductor Ltd (NASDAQ:SEMI) but similarly valued. We will take a look at MYR Group Inc (NASDAQ:MYRG), El Pollo LoCo Holdings Inc (NASDAQ:LOCO), WMIH Corp (OTCMKTS:WMIH), and Lion Biotechnologies Inc (NASDAQ:LBIO). This group of stocks’ market caps are similar to SEMI’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 18 hedge funds with bullish positions and the average amount invested in these stocks was $86 million. That figure was $151 million in SEMI’s case. WMIH Corp (OTCMKTS:WMIH) is the most popular stock in this table. On the other hand El Pollo LoCo Holdings Inc (NASDAQ:LOCO) is the least popular one with only 8 bullish hedge fund positions. Sunedison Semiconductor Ltd (NASDAQ:SEMI) 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 WMIH might be a better candidate to consider taking a long position in.