S&W Seed Company (SANW): How Does It Stack Up Against Its Peers?

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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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.

As one would reasonably expect, specific money managers have jumped into S&W Seed Company (NASDAQ:SANW) headfirst. Cove Street Capital created the most valuable position in S&W Seed Company (NASDAQ:SANW). Cove Street Capital had $0.5 million invested in the company at the end of the third quarter. Sander Gerber’s Hudson Bay Capital Management also initiated a $0.2 million position during the quarter. The other fund with a brand new SANW positions was Ken Griffin’s Citadel Investment Group.

Let’s check out hedge fund activity in other stocks similar to S&W Seed Company (NASDAQ:SANW). We will take a look at Covisint Corp (NASDAQ:COVS), RedHill Biopharma Ltd – ADR (NASDAQ:RDHL), Manitex International, Inc. (NASDAQ:MNTX), and Alaska Communications Systems Group Inc (NASDAQ:ALSK). This group of stocks’ market values resemble SANW’s market value.

As you can see these stocks had an average of 4 hedge funds with bullish positions and the average amount invested in these stocks was $14 million. That figure was $29 million in SANW’s case. Covisint Corp (NASDAQ:COVS) is the most popular stock in this table. On the other hand RedHill Biopharma Ltd – ADR (NASDAQ:RDHL) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks S&W Seed Company (NASDAQ:SANW) 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.

Disclosure: None