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.
YRC Worldwide Inc (NASDAQ:YRCW) was in 19 hedge funds’ portfolios at the end of the third quarter of 2016. YRCW shareholders have witnessed a decrease in enthusiasm from smart money recently. There were 20 hedge funds in our database with YRCW 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 Blue Hills Bancorp Inc (NASDAQ:BHBK), GP Strategies Corporation (NYSE:GPX), and FairPoint Communications Inc (NASDAQ:FRP) to gather more data points.
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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.
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How are hedge funds trading YRC Worldwide, Inc. (NASDAQ:YRCW)?
Heading into the fourth quarter of 2016, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 5% dip from one quarter earlier, and the fourth straight quarter with a decline in the number of bullish hedge fund positions. Below, you can check out the change in hedge fund sentiment towards YRCW over the last 5 quarters. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Marc Lasry of Avenue Capital holds the most valuable position in YRC Worldwide, Inc. (NASDAQ:YRCW), valued at $59.1 million and comprising 12.5% of its 13F portfolio. On Avenue Capital’s heels is Mike Masters of Masters Capital Management, with a $24.6 million position. Remaining hedge funds and institutional investors that are bullish comprise Richard S. Meisenberg’s ACK Asset Management, Jim Simons’ Renaissance Technologies, and Israel Englander’s Millennium 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.
