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Jason Industries Inc (JASN): Are Hedge Funds Right About This Stock?

Before we spend many hours researching a company, we’d like to analyze what hedge funds and billionaire investors think of the stock first. We would like to do so because the elite investors’ consensus returns have been exceptional. The top 30 S&P 500 stocks among hedge funds at the end of September 2014 yielded an average return of 9.5% during the last 12 months ending on October 30. Sixty-three percent of these 30 stocks outperformed the market. Although the elite funds occasionally have their duds, such as Micron and Anadarko Petroleum, which fell 50% and 26%, respectively during the same time period, the hedge fund picks seem to work on average. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Jason Industries Inc (NASDAQ:JASN).

Jason Industries Inc (NASDAQ:JASN) has experienced a decrease in support from the world’s most elite money managers lately. JASN was in 13 hedge funds’ portfolios at the end of the third quarter of 2015. There were 15 hedge funds in our database with JASN 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 Sotherly Hotels Inc (NASDAQ:SOHO), Hydra Industries Acquisition Corp. (NASDAQ:HDRA), and Thompson Creek Metals Company Inc (USA) (NYSE:TC) to gather more data points.

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In the eyes of most market participants, hedge funds are viewed as unimportant, outdated financial vehicles of the past. While there are over 8000 funds trading at the moment, Our experts choose to focus on the aristocrats of this club, approximately 700 funds. Most estimates calculate that this group of people direct the lion’s share of the smart money’s total capital, and by shadowing their highest performing stock picks, Insider Monkey has determined various investment strategies that have historically exceeded the market. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 12 percentage points annually for a decade in their back tests.

Keeping this in mind, let’s take a look at the key action surrounding Jason Industries Inc (NASDAQ:JASN).

Hedge fund activity in Jason Industries Inc (NASDAQ:JASN)

At Q3’s end, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of -13% from the previous quarter. With the smart money’s sentiment swirling, there exist a few notable hedge fund managers who were upping their stakes substantially (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Nelson Obus’s Wynnefield Capital has the biggest position in Jason Industries Inc (NASDAQ:JASN), worth close to $13.5 million, accounting for 5.4% of its total 13F portfolio. On Wynnefield Capital’s heels is Alexander Mitchell of Scopus Asset Management, with an $7.4 million call position; the fund has 0.2% of its 13F portfolio invested in the stock. Other peers that hold long positions consist of Alexander Mitchell’s Scopus Asset Management, Stephen Loukas, David A. Lorber, Zachary George’s FrontFour Capital Group and Ahmet Okumus’s Okumus Fund Management.

Seeing as Jason Industries Inc (NASDAQ:JASN) has experienced bearish sentiment from hedge fund managers, it’s easy to see that there lies a certain “tier” of funds who were dropping their full holdings by the end of the third quarter. Interestingly, Jim Simons’s Renaissance Technologies cut the biggest investment of the 700 funds watched by Insider Monkey, totaling about $0.1 million in stock. Gavin Saitowitz and Cisco J. del Valle’s fund, Springbok Capital, also sold off its stock, about $0 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 2 funds by the end of the third quarter.

Let’s check out hedge fund activity in other stocks similar to Jason Industries Inc (NASDAQ:JASN). These stocks are Sotherly Hotels Inc (NASDAQ:SOHO), Hydra Industries Acquisition Corp. (NASDAQ:HDRA), Thompson Creek Metals Company Inc (USA) (NYSE:TC), and Vail Resorts, Inc. (NYSE:SKIS). This group of stocks’ market valuations are closest to JASN’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SOHO 5 3291 1
HDRA 4 5519 0
TC 9 3332 0
SKIS 6 15897 1

As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $7 million. That figure was $40 million in JASN’s case. Thompson Creek Metals Company Inc (USA) (NYSE:TC) is the most popular stock in this table. On the other hand, Hydra Industries Acquisition Corp. (NASDAQ:HDRA) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Jason Industries Inc (NASDAQ:JASN), with 13 bullish hedge fund positions is the most popular among these stocks. Considering that hedge funds are collectively the most fond of this stock in relation to its market cap peers, it may be a good idea to analyze it further more and maybe include it in your portfolio.

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