The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge funds have been producing disappointing net returns in recent years, however that was partly due to the poor performance of small-cap stocks in general. Well, small-cap stocks finally turned the corner and have been beating the large-cap stocks by more than 10 percentage points over the last 5 months.This means the relevancy of hedge funds’ public filings became inarguable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards IES Holdings Inc (NASDAQ:IESC).
Is IES Holdings Inc (NASDAQ:IESC) a first-rate investment now? Money managers are definitely getting more optimistic. The number of long hedge fund bets experienced an increase of 1 in recent months. There were 6 hedge funds in our database with IESC holdings at the end of September. 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 OMNOVA Solutions Inc. (NYSE:OMN), Applied Optoelectronics Inc (NASDAQ:AAOI), and Almost Family, Inc. (NASDAQ:AFAM) to gather more data points.
Follow Ies Holdings Inc. (NASDAQ:IESC)
Follow Ies Holdings Inc. (NASDAQ:IESC)
We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.
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Keeping this in mind, let’s view the recent action surrounding IES Holdings Inc (NASDAQ:IESC).
How are hedge funds trading IES Holdings Inc (NASDAQ:IESC)?
At the end of the third quarter, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a jump of 20% from the previous quarter. The graph below displays the number of hedge funds with bullish position in IESC over the last 5 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Tontine Asset Management, led by Jeffrey Gendell, holds the most valuable position in IES Holdings Inc (NASDAQ:IESC). According to regulatory filings, the fund has a $237 million position in the stock, comprising 35% of its 13F portfolio. On Tontine Asset Management’s heels is Royce & Associates, led by Chuck Royce, holding a $20.8 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other hedge funds and institutional investors that are bullish contain Renaissance Technologies, one of the largest hedge funds in the world, Josh Goldberg’s G2 Investment Partners Management and Brian Sheehy’s Iszo Capital. We should note that none of these hedge funds are 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.
As industrywide interest jumped, key money managers have been driving this bullishness. G2 Investment Partners Management, led by Josh Goldberg, assembled the most outsized position in IES Holdings Inc (NASDAQ:IESC). According to its latest 13F filing, the fund had $1.9 million invested in the company at the end of the quarter. Brian Sheehy’s Iszo Capital also initiated a $0.7 million position during the quarter. The only other fund with a brand new IESC position is Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as IES Holdings Inc (NASDAQ:IESC) but similarly valued. We will take a look at OMNOVA Solutions Inc. (NYSE:OMN), Applied Optoelectronics Inc (NASDAQ:AAOI), Almost Family, Inc. (NASDAQ:AFAM), and STAAR Surgical Company (NASDAQ:STAA). This group of stocks’ market caps match IESC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OMN | 17 | 43258 | 7 |
| AAOI | 16 | 74677 | 5 |
| AFAM | 15 | 42517 | 1 |
| STAA | 8 | 138314 | 0 |
As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $75 million. That figure was a whooping $269 million in IESC’s case. OMNOVA Solutions Inc. (NYSE:OMN) is the most popular stock in this table. On the other hand STAAR Surgical Company (NASDAQ:STAA) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks IES Holdings Inc (NASDAQ:IESC) is even less popular than STAA. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
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