You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.
Is Innocoll Holdings PLC(NASDAQ:INNL) ready to rally soon? The smart money is surely actually taking a pessimistic view. The number of long hedge fund bets that are revealed through the 13F filings shrunk by 2 in recent months. There were 11 hedge funds in our database with INNL 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 Silicon Motion Technology Corp. (ADR) (NASDAQ:SIMO), Power Integrations Inc (NASDAQ:POWI), and Semtech Corporation (NASDAQ:SMTC) 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.
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With all of this in mind, we’re going to go over the recent action surrounding Innocoll Holdings PLC (NASDAQ:INNL).
What does the smart money think about Innocoll Holdings PLC (NASDAQ:INNL)?
At Q3’s end, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -18% from the previous quarter. On the other hand, there were a total of 5 hedge funds with a bullish position in INNL at the beginning of this year. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Stephen DuBois of Camber Capital Management holds the most valuable position in Innocoll Holdings PLC (NASDAQ:INNL). Camber Capital Management has a $6.2 million position in the stock. Sitting at the No. 2 spot is Joseph Edelman of Perceptive Advisors holding a $3.2 million position. Some other members of the smart money with similar optimism include Anand Parekh’s Alyeska Investment Group, VenBio Select Advisor and James A. Silverman’s Opaleye Management. We should note that none of these elite funds are among our list of the 100 best performing elite funds which is based on the performance of their 13F long positions in non-microcap stocks.
Judging by the fact that Innocoll Holdings PLC (NASDAQ:INNL) has witnessed declining sentiment from the entirety of the hedge funds we track, it’s easy to see that there were a few hedgies that slashed their full holdings in the third quarter. Intriguingly, James E. Flynn’s Deerfield Management dropped the biggest stake of all the hedgies studied by Insider Monkey, valued at an estimated $1.7 million in stock, and Benjamin A. Smith’s Laurion Capital Management was right behind this move, as the fund dropped about $0.1 million worth of shares.
Let’s now take a look at hedge fund activity in other stocks similar to Innocoll Holdings PLC (NASDAQ:INNL). We will take a look at Silicon Motion Technology Corp. (ADR) (NASDAQ:SIMO), Power Integrations Inc (NASDAQ:POWI), Semtech Corporation (NASDAQ:SMTC), and South State Corporation (NASDAQ:SSB). This group of stocks’ market values match INNL’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SIMO | 23 | 254015 | 2 |
| POWI | 9 | 109107 | -3 |
| SMTC | 17 | 82951 | 4 |
| SSB | 11 | 46544 | -3 |
As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $123 million. That figure was $21 million in INNL’s case. Silicon Motion Technology Corp. (ADR) (NASDAQ:SIMO) is the most popular stock in this table. On the other hand Power Integrations Inc (NASDAQ:POWI) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Innocoll Holdings PLC (NASDAQ:INNL) is as less popular than POWI. 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.
Disclosure: None
