Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
One of the stocks that saw an increase in popularity among smart money investors tracked by Insider Monkey is Huntsman Corporation (NYSE:HUN). During the third quarter, the number of funds holding shares of the company went up by four. 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 John Wiley & Sons Inc (NYSE:JW), BankUnited (NYSE:BKU), and Spirit Airlines Incorporated (NASDAQ:SAVE) 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.
With all of this in mind, let’s take a gander at the latest action regarding Huntsman Corporation (NYSE:HUN).
How have hedgies been trading Huntsman Corporation (NYSE:HUN)?
Overall, 42 investors followed by us held shares of Huntsman Corporation at the end of the third quarter, a change of 11% from the end of June. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Cliff Asness’ AQR Capital Management has the most valuable position in Huntsman Corporation (NYSE:HUN), worth close to $111.8 million, amounting to 0.2% of its total 13F portfolio. On AQR Capital Management’s heels is Appaloosa Management LP, led by David Tepper, which holds a $103.2 million position; the fund has 2.3% of its 13F portfolio invested in the stock. Remaining members of the smart money with similar optimism comprise Israel Englander’s Millennium Management, Alan Fournier’s Pennant Capital Management, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Consequently, some big names were breaking ground themselves. Pennant Capital Management, managed by Alan Fournier, assembled the largest position in Huntsman Corporation (NYSE:HUN). Pennant Capital Management had $47.1 million invested in the company at the end of the quarter. Joel Greenblatt’s Gotham Asset Management also made a $19.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Steven Tananbaum’s GoldenTree Asset Management, Jonathan Barrett and Paul Segal’s Luminus Management, and Daniel Arbess’ Perella Weinberg Partners.
Let’s now review hedge fund activity in other stocks similar to Huntsman Corporation (NYSE:HUN). These stocks are John Wiley & Sons Inc (NYSE:JW), BankUnited (NYSE:BKU), Spirit Airlines Incorporated (NASDAQ:SAVE), and New Residential Investment Corp (NYSE:NRZ). This group of stocks’ market caps are closest to HUN’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 19 investors holding shares and the average amount invested in these stocks was $242 million., which is lower than the $563 million figure in Huntsman’s case. Spirit Airlines Incorporated (NASDAQ:SAVE) is the most popular stock in this table, while John Wiley & Sons Inc (NYSE:JW) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Huntsman Corporation (NYSE:HUN) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.