The worries about the election and the ongoing uncertainty about the path of interest-rate increases have been keeping investors on the sidelines. Of course, most hedge funds and other asset managers have been underperforming main stock market indices since the middle of 2015. Interestingly though, smaller-cap stocks registered their best performance relative to the large-capitalization stocks since the end of the June quarter, suggesting that this may be the best time to take a cue from their stock picks. In fact, the Russell 2000 Index gained more than 15% since the beginning of the third quarter, while the Standard and Poor’s 500 benchmark returned less than 6%. This article will lay out and discuss the hedge fund and institutional investor sentiment towards William Lyon Homes (NYSE:WLH).
William Lyon Homes (NYSE:WLH) has seen an increase in hedge fund sentiment recently. WLH was in 17 hedge funds’ portfolios at the end of September. There were 16 hedge funds in our database with WLH holdings 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 Clean Energy Fuels Corp (NASDAQ:CLNE), Francesca’s Holdings Corp (NASDAQ:FRAN), and CoLucid Pharmaceuticals Inc (NASDAQ:CLCD) 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.
How have hedgies been trading William Lyon Homes (NYSE:WLH)?
At Q3’s end, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, up by 6% from one quarter earlier. On the other hand, there were a total of 20 hedge funds with a bullish position in WLH at the beginning of this year. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, GMT Capital, led by Thomas E. Claugus, holds the most valuable position in William Lyon Homes (NYSE:WLH). GMT Capital has a $89.7 million position in the stock, comprising 1.8% of its 13F portfolio. Sitting at the No. 2 spot is John Paulson of Paulson & Co, with a $61.6 million position. Other peers that hold long positions contain Steve Pei’s Gratia Capital, Joe Huber’s Huber Capital Management and Ken Heebner’s Capital Growth Management. 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.