Do Hedge Funds Love Isle of Capri Casinos (ISLE)?

Hedge funds run by legendary names like Nelson Peltz and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources on analyzing and uncovering data about small-cap stocks that the big brokerage houses don’t follow. Small caps are where they can generate significant out-performance. That’s why we pay special attention to hedge fund activity in these stocks.

Is Isle of Capri Casinos (NASDAQ:ISLE) going to take off soon? Prominent investors are getting more optimistic. The number of bullish hedge fund bets inched up by 1 lately. At the end of this article we will also compare ISLE to other stocks including Wabash National Corporation (NYSE:WNC), Roadrunner Transportation Systems Inc (NYSE:RRTS), and Merge Healthcare Inc. (NASDAQ:MRGE) to get a better sense of its popularity.

With all of this in mind, we’re going to go over the recent action surrounding Isle of Capri Casinos (NASDAQ:ISLE).

Hedge fund activity in Isle of Capri Casinos (NASDAQ:ISLE)

At Q3’s end, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from the second quarter. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Jim Simons’ Renaissance Technologies has the largest position in Isle of Capri Casinos (NASDAQ:ISLE), worth close to $21.2 million, corresponding to 0.1% of its total 13F portfolio. On Renaissance Technologies’s heels is Don Morgan of Brigade Capital, with a $12.5 million position; the fund has 1.5% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that are bullish contain John Overdeck and David Siegel’s Two Sigma Advisors, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Cliff Asness’ AQR Capital Management.

With a general bullishness amongst the heavyweights, some big names were leading the bulls’ herd. McKinley Capital Management, managed by Robert B. Gillam, created the most outsized position in Isle of Capri Casinos (NASDAQ:ISLE). McKinley Capital Management had $3 million invested in the company at the end of the quarter. David Costen Haley’s HBK Investments also made a $1.8 million investment in the stock during the quarter. The only other fund with a new position in the stock is Peter Algert and Kevin Coldiron’s Algert Coldiron Investors.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Isle of Capri Casinos (NASDAQ:ISLE) but similarly valued. We will take a look at Wabash National Corporation (NYSE:WNC), Roadrunner Transportation Systems Inc (NYSE:RRTS), Merge Healthcare Inc. (NASDAQ:MRGE), and The Providence Service Corporation (NASDAQ:PRSC). This group of stocks’ market valuations are closest to ISLE’s market valuation.

As you can see these stocks had an average of 15.5 hedge funds with bullish positions and the average amount invested in these stocks was $88 million. That figure was $78 million in ISLE’s case. Wabash National Corporation (NYSE:WNC) is the most popular stock in this table. On the other hand Roadrunner Transportation Systems Inc (NYSE:RRTS) is the least popular one with only 11 bullish hedge fund positions. Isle of Capri Casinos (NASDAQ:ISLE) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard WNC might be a better candidate to consider a long position.