Reputable billionaire investors such as Nelson Peltz and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won’t accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.
Is BGC Partners, Inc. (NASDAQ:BGCP) a marvelous stock to buy now? The best stock pickers are getting more bullish. The number of bullish hedge fund bets improved by 2 in recent months. BGCP was in 18 hedge funds’ portfolios at the end of September. There were 16 hedge funds in our database with BGCP holdings at the end of the previous quarter. 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 Gold Fields Limited (ADR) (NYSE:GFI), Littelfuse, Inc. (NASDAQ:LFUS), and Cheetah Mobile Inc (ADR) (NYSE:CMCM) to gather more data points.
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Now, we’re going to go over the recent action regarding BGC Partners, Inc. (NASDAQ:BGCP).
What does the smart money think about BGC Partners, Inc. (NASDAQ:BGCP)?
Heading into Q4, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from the second quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Amy Minella’s Cardinal Capital has the number one position in BGC Partners, Inc. (NASDAQ:BGCP), worth close to $36.2 million, comprising 2.3% of its total 13F portfolio. Coming in second is Israel Englander of Millennium Management, with an $31.7 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining members of the smart money with similar optimism contain Jim Simons’s Renaissance Technologies, Matthew Taylor and Ty Popplewell’s Kortright Capital Partners and Ken Griffin’s Citadel Investment Group.
As industrywide interest jumped, key money managers have been driving this bullishness. Scoggin, managed by Curtis Schenker and Craig Effron, assembled the most outsized position in BGC Partners, Inc. (NASDAQ:BGCP). Scoggin had $8 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also initiated an $3.3 million position during the quarter. The following funds were also among the new BGCP investors: Mike Vranos’s Ellington, David Dreman’s Dreman Value Management, and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as BGC Partners, Inc. (NASDAQ:BGCP) but similarly valued. These stocks are Gold Fields Limited (ADR) (NYSE:GFI), Littelfuse, Inc. (NASDAQ:LFUS), Cheetah Mobile Inc (ADR) (NYSE:CMCM), and Nortel Inversora S.A. (ADR) (NYSE:NTL). This group of stocks’ market caps resemble BGCP’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GFI | 16 | 165266 | 0 |
| LFUS | 13 | 136706 | -7 |
| CMCM | 5 | 21203 | -5 |
| NTL | 4 | 16733 | 0 |
As you can see these stocks had an average of 9.5 hedge funds with bullish positions and the average amount invested in these stocks was $85 million. That figure was $128 million in BGCP’s case. Gold Fields Limited (ADR) (NYSE:GFI) is the most popular stock in this table. On the other hand Nortel Inversora S.A. (ADR) (NYSE:NTL) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks BGC Partners, Inc. (NASDAQ:BGCP) 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.
