Insider Monkey’s quarterly newsletter is a comprehensive hedge fund report that analyzes 13F filings from more than 800 hedge funds and shares hedge funds’ best small and large-cap long investment ideas as well as best stocks to short.
More than 75 pages in length, the premium newsletter also covers top mid-cap and micro-cap hedge fund stock picks, in-depth analysis of 25 billionaire hedge fund managers and their best stock picks, most concentrated positions among hedge funds, and high conviction picks of value hedge funds.
If you’d like hear what hedge fund managers think about the market and individual stocks, but don’t have $5,000- $10,000 to spend on a hedge fund investment conference, the best alternative is reading hedge fund investor letters. Our quarterly newsletter devotes nearly a quarter of its pages to excerpts from hedge fund investor letters where fund managers discuss their market outlook or investment thesis in individual stocks.
Best Stocks To Short
This is a quantitative investment strategy that lists 5 to 10 small-cap stocks every quarter with a large number of long hedge funds and a large percent of short sellers. These are the most popular battleground stocks. Historically short sellers won most of these battles.
We have been sharing a list of short candidates every quarter since February 2017 and these stocks lost a cumulative 36.2% through May 15, 2020. S&P 500 Index ETF (SPY) returned nearly 30% during the same period. Basically our short strategy beat the market by 66 percentage points in 3 years and 3 months.
Best Small-cap Stock Picks of the Best Performing Hedge Funds Strategy
Every quarter we identify the consensus small-cap stock picks of the 100 best performing hedge funds. These stocks have market capitalization of $1 billion to $10 billion and have limited short interest.
Our best performing hedge funds strategy’s small-cap stock picks returned 69.5% since its inception in May 2014 through May 15, 2020. Russell 2000 ETF (IWM) returned 21.1% during the same period. We were able to generate alpha (excess returns) of 48 percentage points in 6 years.
Best Large-cap Stock Picks of the Best Performing Hedge Funds Strategy
Every quarter we identify the top 7 large-cap stock picks among hedge funds that have limited short interest.
The top 10 most popular large-cap stocks among hedge funds returned 185% since the beginning of 2014 (through May 15, 2020), vs. 75% gain for the S&P 500 ETF (SPY).
We aren’t one of those slimy newsletter marketers who try to part mom-and-pop investors from their hard earned dollars by touting the incredible returns of SOME of our recommendations. The majority of active fund managers can’t beat the market after taking into account the fees they charge. In fact, the majority of investment professionals, including your financial advisor who charges 1% annual fee, can’t beat the market. Passive index fund investors have already given up on the idea of beating the market.
If beating the market is so darn difficult, what makes us think that we can do it?
Our research director has a Ph.D. in financial economics and he has been doing quantitative stock research for more than a decade. This doesn’t mean that he can beat the market but it means that he can at least do high quality research and understand the research done by other academics.
He has been analyzing the quarterly 13F filings made by almost all of the active and dead hedge funds covering the 18-year period between 1999 and 2017. His research revealed that ordinary investors could have outperformed the S&P 500 index by imitating the consensus stock picks of the top 100 best performing hedge funds.
Our thesis is very simple. Hedge funds are strongly incentivized to outperform the market. Some hedge fund managers make billions of dollars in a single year if they generate decent returns. They hire the smartest students graduating from the best universities in the world. They hire those students’ professors, they hire the top experts and consultants in the field to gain just a tiny edge over other investors – including you. And sometimes they cheat and get their hands on illegal inside information. However, we think that hedge funds are more likely to get an edge over ordinary investors in small-cap stocks because these stocks aren’t well-covered and well-researched by a lot of investors. So, we formed our thesis:
When several good hedge fund managers buy the same small-cap stocks independent of each other, those small-cap stocks should outperform the market on average.
This is a very simple and intuitive thesis. Think about it. If hedge funds can’t beat the market by picking under-researched small-cap stocks, they sure can’t beat the market by picking large cap stocks that are followed by everyone.
There aren’t any gimmicks. We usually pick 5 to 15 stocks every quarter and invest equal amounts on each position. In order for you to evaluate whether this strategy is the right one for you, we will share ALL of OUR stock picks for the following four quarters.
Quarter 1 (Published on August 15, 2017): Our Best Performing Hedge Funds Strategy outperformed the market by 3.0 percentage points in 3 months.
Best Performing Hedge Funds Strategy Return: 7.5%
S&P 500 ETF (SPY) Return: 4.5%
- Yandex (YNDX): 3.3%
- IAC/InterActiveCorp (IAC): 18.8%
- Liberty Media Corporation (FWONK): 5.5%
- New Oriental Education & Technology Group (EDU): 5.4%
- Momo Inc. (MOMO): -30.8%
- Take-Two Interactive Software, Inc. (TTWO): 29.5%
- Berry Global Group, Inc. (BERY): 0.4%
- Marvell Technology Group Ltd. (MRVL): 27.7%
Quarter 2 (Published on November 15, 2017): Our Best Performing Hedge Funds Strategy outperformed the market by 2.5 percentage points in 3 months.
Best Performing Hedge Funds Strategy Return: 9.5%
S&P 500 ETF (SPY) Return: 7.0%
- Adient plc (ADNT): -14.3%
- Yandex N.V. (YNDX): 34.3%
- Sina Corporation (SINA): 14.0%
- New Oriental Education & Technology Group (EDU): 9.1%
- Alcoa Corporation (AA): 12.7%
- Take-Two Interactive Software, Inc. (TTWO): -7.8%
- IAC/InterActiveCorp (IAC): 18.8%
Issue 3 (Published on February 15, 2018): Our Best Performing Hedge Funds Strategy outperformed the market by 5.8 percentage points in 3 months.
Best Performing Hedge Funds Strategy Return: 6.9%
S&P 500 ETF (SPY) Return: 1.1%
- Peabody Energy Corporation (BTU): -0.3%
- RSP Permian, Inc. (RSPP): 33.0%
- C&J Energy Services, Inc (CJ): 15.5%
- Alcoa Corporation (AA): 5.5%
- US Foods Holding Corp. (USFD): 7.3%
- Builders FirstSource, Inc. (BLDR): -4.6%
- Hyatt Hotels Corporation (H): 2.1%
- Energen Corporation (EGN): 27.2%
- Cott Corporation (COT): 3.4%
- LPL Financial Holdings Inc. (LPLA): 8.2%
- Newmark Group, Inc. (NMRK): -3.4%
- Olin Corporation (OLN): 0.5%
- Constellium N.V. (CSTM): -4.7%
Quarter 4 (Published on May 16, 2018): Our Best Performing Hedge Funds Strategy outperformed the market by 7.8 percentage points in 2.5 months (through July 23, 2018).
Best Performing Hedge Funds Strategy Return: 11.2%
S&P 500 ETF (SPY) Return: 3.8%
- Zendesk, Inc. (ZEN): 10.9%
- Ringcentral, Inc. (RNG): 7.9%
- Ascendis Pharma A/S (ASND): 1.7%
- FibroGen, Inc (FGEN): 26.2%
- Mimecast Limited (MIME): -0.3%
- Talend S.A. (TLND): 11.2%
- Tableau Software, Inc. (DATA): 20.4%
If, after spending a little time absorbing our past record and our current recommendations, you aren’t convinced Insider Monkey’s Best Performing Hedge Funds Strategy will change forever how you invest your money, you can tell us within the first 14 days and we’ll refund your money, no questions asked.
As a Premium newsletter member you’ll also be entitled to our list of most popular battleground stocks. Ordinary investors can benefit from this list by avoiding or shorting these stocks. Professional investors can benefit by shorting them. These stocks underperformed the S&P 500 Index by more than 145 percentage points since the beginning of September 2012.
For a limited time we have a 14-day no questions asked money back guarantee option.
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Frequently Asked Questions
1. How many issues do you produce in a year, and when are they typically released?
Our primary premium newsletter is produced quarterly and is published around February 14th, May 15th, August 14th, and November 14th of each year.
2. Do you offer any other services besides the quarterly newsletter?
We also publish a monthly activist newsletter, which costs $199 per month or $449 per year with an annual subscription. In each monthly newsletter, a top-tier hedge fund manager is interviewed and/or analyzed, and 1-2 novel investment ideas are shared.
3. What would I get if I were to subscribe?
Premium newsletter members will receive access to our investment strategies.
More than 75 pages in length, the premium newsletter also covers our small-cap hedge fund strategy’s stock picks, in-depth analysis of 23 billionaire hedge fund managers and their best stock picks, most concentrated positions among hedge funds, stocks dumped by hedge funds, high conviction picks of value hedge funds, and excerpts from hedge fund investor letters.
4. Does your newsletter give alerts on when to buy and sell and the position percentages of one’s portfolio?
Each quarter we show our subscribers what to sell, what to buy, and what to maintain in their portfolios, within the confines of our strategies.
5. Is there a trial period for your services?
All new premium members receive a partial refund if cancelled within 14 days of purchase. Unfortunately, we don’t offer refunds if you previously subscribed to and cancelled a subscription.
6. Can I cancel after 14 days?
After the 14-day trial period, membership is final for four quarterly issues, i.e., one full year.
7. So how many issues do I actually receive? Does a membership include past quarterly reports too?
Yes. If you are subscribed to our quarterly newsletter you will receive access to all archived issues and 4 new issues over the next 12 months. If you are subscribed to our monthly newsletter you won’t have access to our archived issues.
8. What sized companies do you focus on?
The list of stocks we focus on in our small-cap strategies has market values between $1 billion and $10 billion. There is no market cap limit in our large-cap strategy (except a minimum of $20 billion).
9. Do you guarantee that I can beat the market by following your strategy?
No. Our strategy outperformed the market in the past and in our backtests. However, this doesn’t guarantee that it will outperform the market in the future and on a consistent basis. Professional investors know that there aren’t any stock picking strategies that can beat the market consistently.
10. How can I pay for Insider Monkey’s premium services?
Premium subscribers may pay via Bitcoin, Ethereum, Paypal, check or credit card.