Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: Box Inc (NYSE:BOX).
Is Box Inc (NYSE:BOX) an outstanding stock to buy now? Hedge funds believe so, as they are buying. The number of long hedge fund bets rose by 7 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 EP Energy Corp (NYSE:EPE), United Community Banks Inc (NASDAQ:UCBI), and TASER International, Inc. (NASDAQ:TASR) 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.
How are hedge funds trading Box Inc (NYSE:BOX)?
At Q3’s end, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 54% climb from the second quarter of 2016 and the fourth consecutive quarter in which more hedge funds have bought into the stock. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Bares Capital Management, managed by Brian Bares, holds the most valuable position in Box Inc (NYSE:BOX). Bares Capital Management has a $79.1 million position in the stock, comprising 4.7% of its 13F portfolio. Sitting at the No. 2 spot is Coatue Management, led by Philippe Laffont, holding a $32.1 million position. Some other professional money managers that hold long positions contain Matthew Knauer and Mina Faltas’ Nokota Management and John Overdeck and David Siegel’s Two Sigma Advisors.