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.
Is S&W Seed Company (NASDAQ:SANW) going to take off soon? Prominent investors are indeed in an optimistic mood. The number of long hedge fund positions that are disclosed in regulatory 13F filings went up by 2 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 Covisint Corp (NASDAQ:COVS), RedHill Biopharma Ltd – ADR (NASDAQ:RDHL), and Manitex International, Inc. (NASDAQ:MNTX) 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.
What have hedge funds been doing with S&W Seed Company (NASDAQ:SANW)?
Heading into the fourth quarter of 2016, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, a gain of 40% from one quarter earlier. By comparison, 6 hedge funds held shares or bullish call options in SANW heading into this year, which is also up since then. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Michael Price’s MFP Investors has the biggest position in S&W Seed Company (NASDAQ:SANW), worth close to $16.3 million, accounting for 2.2% of its total 13F portfolio. On MFP Investors’ heels is Nelson Obus of Wynnefield Capital, with a $10.8 million position; the fund has 3.6% of its 13F portfolio invested in the stock. Remaining professional money managers that are bullish encompass Ken Grossman and Glen Schneider’s SG Capital Management, Jeffrey Bronchick’s Cove Street Capital, and Renaissance Technologies, one of the biggest hedge funds in the world. We should note that two of these hedge funds (MFP Investors and SG Capital Management) are among our list of the 100 best performing hedge funds, which is based on the performance of their 13F long positions in non-micro-cap stocks.