Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is the small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we follow the hedge fund activity in the small-cap space.
Is Zeltiq Aesthetics Inc (NASDAQ:ZLTQ) a cheap investment now? The smart money is becoming more confident. The number of long hedge fund positions rose by 3 in recent months. 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 Theravance Biopharma Inc (NASDAQ:TBPH), United Fire Group, Inc. (NASDAQ:UFCS), and Transportadora de Gas del Sur SA (ADR) (NYSE:TGS) 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 are hedge funds trading Zeltiq Aesthetics Inc (NASDAQ:ZLTQ)?
At the end of the third quarter, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a 16% rise from one quarter earlier, though hedge fund ownership remains well below where it was three quarters prior. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Dennis Purcell’s Aisling Capital has the largest position in Zeltiq Aesthetics Inc (NASDAQ:ZLTQ), worth close to $63.1 million, corresponding to 13% of its total 13F portfolio. The second largest stake is held by William Leland Edwards of Palo Alto Investors, with a $55.5 million position; 3.2% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors that are bullish include Joel Ramin’s 12 West Capital Management, Steve Cohen’s Point72 Asset Management and Israel Englander’s Millennium Management.