Most investors tend to think that hedge funds and other asset managers are worthless, as they cannot beat even simple index fund portfolios. In fact, most people expect hedge funds to compete with and outperform the bull market that we have witnessed over the past few years. However, hedge funds are generally partially hedged and aim at delivering attractive risk-adjusted returns rather than following the ups and downs of equity markets hoping that they will outperform the broader market. Our research shows that hedge funds do have great stock picking skills, so let’s take a glance at the smart money sentiment towards Smith & Wesson Holding Corporation (NASDAQ:SWHC).
Smith & Wesson Holding Corporation (NASDAQ:SWHC) has experienced an increase in hedge fund sentiment recently. SWHC was in 30 hedge funds’ portfolios at the end of September. There were 22 hedge funds in our database with SWHC positions at the end of the previous quarter. At the end of this article we will also compare SWHC to other stocks, including Infinity Property and Casualty Corp. (NASDAQ:IPCC), Canadian Solar Inc. (NASDAQ:CSIQ), and Repligen Corporation (NASDAQ:RGEN) to get a better sense of its popularity.
In today’s marketplace there are many signals stock traders employ to evaluate publicly traded companies. Two of the most under-the-radar signals are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the top picks of the best hedge fund managers can outperform their index-focused peers by a significant margin (see the details here).
With all of this in mind, we’re going to analyze the new action surrounding Smith & Wesson Holding Corporation (NASDAQ:SWHC).
What have hedge funds been doing with Smith & Wesson Holding Corporation (NASDAQ:SWHC)?
Heading into Q4, a total of 30 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 36% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Millennium Management, managed by Israel Englander, holds the most valuable position in Smith & Wesson Holding Corporation (NASDAQ:SWHC). The fund has a $20.2 million position in the stock, comprising less than 0.1% of its 13F portfolio. Coming in second is Gotham Asset Management, managed by Joel Greenblatt, which holds a $18.5 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining professional money managers with similar optimism encompass D. E. Shaw’s D E Shaw, Chuck Royce’s Royce & Associates and Peter S. Park’s Park West Asset Management.