Do Hedge Funds Love Spirit Airlines Incorporated (SAVE)?

Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.

Spirit Airlines Incorporated (NASDAQ:SAVE) was in 30 hedge funds’ portfolios at the end of the third quarter of 2016. SAVE shareholders have witnessed an increase in hedge fund interest lately. There were 22 hedge funds in our database with SAVE holdings at the end of the previous quarter. At the end of this article we will also compare SAVE to other stocks including New Residential Investment Corp (NYSE:NRZ), Energizer Holdings, Inc. (NYSE:ENR), and Sensient Technologies Corporation (NYSE:SXT) to get a better sense of its popularity.

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, let’s go over the key action regarding Spirit Airlines Incorporated (NASDAQ:SAVE).

What have hedge funds been doing with Spirit Airlines Incorporated (NASDAQ:SAVE)?

At Q3’s end, a total of 30 of the hedge funds tracked by Insider Monkey were bullish on this stock, a surge of 36% from the previous quarter. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were upping their stakes substantially (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Ken Griffin’s Citadel Investment Group has the most valuable position in Spirit Airlines Incorporated (NASDAQ:SAVE), worth close to $58 million and corresponding to 0.1% of its total 13F portfolio. The second most bullish fund manager is Royce & Associates, led by Chuck Royce, holding a $41.6 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Other professional money managers that hold long positions contain Paul Marshall and Ian Wace’s Marshall Wace LLP, Gregg Moskowitz’s Interval Partners and John Tompkins’s Tyvor Capital.

As industrywide interest jumped, some big names were breaking ground themselves. Tyvor Capital, managed by John Tompkins, created the most outsized position in Spirit Airlines Incorporated (NASDAQ:SAVE). The fund reportedly had $29.7 million invested in the company at the end of the quarter. Doug Gordon, Jon Hilsabeck and Don Jabro’s Shellback Capital also initiated a $21.7 million position during the quarter. The following funds were also among the new SAVE investors: Robert Polak’s Anchor Bolt Capital, Gregg Moskowitz’s Interval Partners, and Wayne Cooperman’s Cobalt Capital Management.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Spirit Airlines Incorporated (NASDAQ:SAVE) but similarly valued. We will take a look at New Residential Investment Corp (NYSE:NRZ), Energizer Holdings, Inc. (NYSE:ENR), Sensient Technologies Corporation (NYSE:SXT), and ALLETE Inc (NYSE:ALE). This group of stocks’ market caps resemble SAVE’s market cap.

As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $181 million. That figure was $338 million in SAVE’s case. Energizer Holdings, Inc. (NYSE:ENR) is the most popular stock in this table. On the other hand ALLETE Inc (NYSE:ALE) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Spirit Airlines Incorporated (NASDAQ:SAVE) 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.

Disclosure: none.