The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on September 30th, about a month before the elections. We at Insider Monkey have made an extensive database of more than 817 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Virco Mfg. Corporation (NASDAQ:VIRC) based on those filings.
Virco Mfg. Corporation (NASDAQ:VIRC) was in 3 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 3. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. VIRC has seen an increase in activity from the world’s largest hedge funds lately. There were 2 hedge funds in our database with VIRC holdings at the end of June. Our calculations also showed that VIRC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In today’s marketplace there are tons of signals investors have at their disposal to analyze their holdings. Some of the less known signals are hedge fund and insider trading signals. We have shown that, historically, those who follow the top picks of the top fund managers can outperform the market by a significant amount (see the details here).
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now let’s take a peek at the recent hedge fund action encompassing Virco Mfg. Corporation (NASDAQ:VIRC).
How are hedge funds trading Virco Mfg. Corporation (NASDAQ:VIRC)?
Heading into the fourth quarter of 2020, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 50% from the second quarter of 2020. By comparison, 3 hedge funds held shares or bullish call options in VIRC a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Minerva Advisors held the most valuable stake in Virco Mfg. Corporation (NASDAQ:VIRC), which was worth $1.9 million at the end of the third quarter. On the second spot was Camber Capital Management which amassed $0.6 million worth of shares. Renaissance Technologies was also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Minerva Advisors allocated the biggest weight to Virco Mfg. Corporation (NASDAQ:VIRC), around 1.28% of its 13F portfolio. Camber Capital Management is also relatively very bullish on the stock, designating 0.03 percent of its 13F equity portfolio to VIRC.
With a general bullishness amongst the heavyweights, some big names were breaking ground themselves. Camber Capital Management, managed by Stephen DuBois, established the most valuable position in Virco Mfg. Corporation (NASDAQ:VIRC). Camber Capital Management had $0.6 million invested in the company at the end of the quarter.
Let’s now review hedge fund activity in other stocks similar to Virco Mfg. Corporation (NASDAQ:VIRC). We will take a look at Altisource Asset Management Corp (NYSE:AAMC), Steel Connect, Inc. (NASDAQ:STCN), A. H. Belo Corporation (NYSE:AHC), Flanigan’s Enterprises, Inc. (NYSE:BDL), Bellicum Pharmaceuticals Inc (NASDAQ:BLCM), Taylor Devices, Inc. (NASDAQ:TAYD), and U.S. Gold Corp. (NASDAQ:USAU). This group of stocks’ market valuations are similar to VIRC’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 2.3 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $3 million in VIRC’s case. Steel Connect, Inc. (NASDAQ:STCN) is the most popular stock in this table. On the other hand Altisource Asset Management Corp (NYSE:AAMC) is the least popular one with only 1 bullish hedge fund positions. Virco Mfg. Corporation (NASDAQ:VIRC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VIRC is 69.3. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 28.1% in 2020 through November 23rd and beat the market again by 15.4 percentage points. Unfortunately VIRC wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on VIRC were disappointed as the stock returned 1.4% since the end of September (through 11/23) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.