The worries about the election and the ongoing uncertainty about the path of interest-rate increases have been keeping investors on the sidelines. Of course, most hedge funds and other asset managers have been underperforming main stock market indices since the middle of 2015. Interestingly though, smaller-cap stocks registered their best performance relative to the large-capitalization stocks since the end of the June quarter, suggesting that this may be the best time to take a cue from their stock picks. In fact, the Russell 2000 Index gained more than 15% since the beginning of the third quarter, while the Standard and Poor’s 500 benchmark returned less than 6%. This article will lay out and discuss the hedge fund and institutional investor sentiment towards Sparton Corporation (NYSE:SPA) .
Is Sparton Corporation (NYSE:SPA) ready to rally soon? Money managers are getting more bullish. The number of bullish hedge fund positions experienced an increase of 8 lately. SPA was in 15 hedge funds’ portfolios at the end of September. There were 7 hedge funds in our database with SPA positions 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 Exa Corp (NASDAQ:EXA), Monster Worldwide, Inc. (NYSE:MWW), and Build-A-Bear Workshop, Inc (NYSE:BBW) to gather more data points.
Follow Sparton Corp (NYSE:SPA)
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What have hedge funds been doing with Sparton Corporation (NYSE:SPA)?
At the end of the third quarter, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a gain of 114% from the previous quarter. The graph below displays the number of hedge funds with bullish position in SPA 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.
When looking at the institutional investors followed by Insider Monkey, Tappan Street Partners, led by Prasad Phatak and Chris Koranda, holds the number one position in Sparton Corporation (NYSE:SPA). Tappan Street Partners has a $13.1 million position in the stock, comprising 17.8% of its 13F portfolio. On Tappan Street Partners’ heels is Beddow Capital Management, led by Ed Beddow and William Tichy, holding a $12.7 million position; the fund has 5.2% of its 13F portfolio invested in the stock. Remaining peers with similar optimism include Jim Simons’ Renaissance Technologies, and Arnaud Ajdler’s Engine Capital. We should note that Engine Capital is 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.
With a general bullishness amongst the heavyweights, specific money managers were leading the bulls’ herd. Beddow Capital Management initiated the most valuable position in Sparton Corporation (NYSE:SPA). Cliff Asness’ AQR Capital Management also made a $0.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Matthew Hulsizer’s PEAK6 Capital Management, John Overdeck and David Siegel’s Two Sigma Advisors, and Mike Vranos’ Ellington.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Sparton Corporation (NYSE:SPA) but similarly valued. We will take a look at Exa Corp (NASDAQ:EXA), Monster Worldwide, Inc. (NYSE:MWW), Build-A-Bear Workshop, Inc (NYSE:BBW), and Immersion Corporation (NASDAQ:IMMR). This group of stocks’ market values resemble SPA’s market value.
Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
---|---|---|---|
EXA | 6 | 22085 | 3 |
MWW | 20 | 50220 | 1 |
BBW | 12 | 40493 | 0 |
IMMR | 14 | 101608 | -6 |
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $54 million. That figure was $49 million in SPA’s case. Monster Worldwide, Inc. (NYSE:MWW) is the most popular stock in this table. On the other hand Exa Corp (NASDAQ:EXA) is the least popular one with only 6 bullish hedge fund positions. Sparton Corporation (NYSE:SPA) 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 MWW might be a better candidate to consider taking a long position in.
Disclosure: None