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: Inteliquent Inc (NASDAQ:IQNT).
Inteliquent Inc (NASDAQ:IQNT) was in 13 hedge funds’ portfolios at the end of September. IQNT investors should pay attention to an increase in support from the world’s most successful money managers lately. There were 11 hedge funds in our database with IQNT positions at the end of the previous quarter. At the end of this article we will also compare IQNT to other stocks including Star Gas Partners, L.P. (NYSE:SGU), Exterran Corp (NYSE:EXTN), and CoBiz Financial Inc (NASDAQ:COBZ) to get a better sense of its popularity.
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.
Hedge fund activity in Inteliquent Inc (NASDAQ:IQNT)
Heading into the fourth quarter of 2016, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, an 18% increase from the second quarter of 2016. On the other hand, there were a total of 18 hedge funds with a bullish position in IQNT at the beginning of this year, so hedge fund ownership of the stock is still down in 2016. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Renaissance Technologies, led by Jim Simons, holds the biggest position in Inteliquent Inc (NASDAQ:IQNT). Renaissance Technologies has a $33 million position in the stock. Sitting at the No. 2 spot is Nokomis Capital, led by Brett Hendrickson, which holds an $18.2 million position; the fund has 3.9% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism include Arnaud Ajdler’s Engine Capital, Joel Greenblatt’s Gotham Asset Management, and Cliff Asness’ AQR Capital Management. We should note that Engine Capital is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.