The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider Enzymotec Ltd (NASDAQ:ENZY) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Enzymotec Ltd (NASDAQ:ENZY) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 5 hedge funds’ portfolios at the end of September. It is important to note that the shares of Enzymotec Ltd (NASDAQ:ENZY) were up 8.38% during the last quarter. A positive trading atmosphere during the quarter might appear contradictory against the hedge fund inactivity, prompting us to cover hedge funds with stakes in Enzymotec Ltd (NASDAQ:ENZY) at the end of the last quarter.
At the end of this article, we will also compare Enzymotec Ltd (NASDAQ:ENZY) to other stocks, including Bonanza Creek Energy Inc (NYSE:BCEI), Xerium Technologies, Inc. (NYSE:XRM), and Utah Medical Products, Inc. (NASDAQ:UTMD) to get a better sense of its popularity.
If you’d ask most traders, hedge funds are perceived as underperforming, outdated investment tools of years past. While there are greater than 8000 funds with their doors open today, Our experts look at the elite of this club, about 700 funds. These hedge fund managers orchestrate the lion’s share of the smart money’s total capital, and by watching their finest stock picks, Insider Monkey has discovered many investment strategies that have historically outperformed the market. Insider Monkey’s small-cap hedge fund strategy outpaced the S&P 500 index by 12 percentage points annually for a decade in their back tests.
Keeping this in mind, let’s take a peek at the recent action surrounding Enzymotec Ltd (NASDAQ:ENZY).
What does the smart money think about Enzymotec Ltd (NASDAQ:ENZY)?
At the end of the third quarter, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a unchanged from one quarter earlier. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, John Paulson’s Paulson & Co has the biggest position in Enzymotec Ltd (NASDAQ:ENZY), worth close to $38.4 million, accounting for 0.2% of its total 13F portfolio. The second largest stake is held by Visium Asset Management, led by Jacob Gottlieb, holding a $19.9 million position; 0.3% of its 13F portfolio is allocated to the stock. Some other professional money managers with similar optimism contain Tiger Management, Israel Englander’s Millennium Management, and Renaissance Technologies.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Manatuck Hill Partners. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically, a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case here because only one of the 700+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Tiger Management).
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Enzymotec Ltd (NASDAQ:ENZY) but similarly valued. We will take a look at Bonanza Creek Energy Inc (NYSE:BCEI), Xerium Technologies, Inc. (NYSE:XRM), Utah Medical Products, Inc. (NASDAQ:UTMD), and Genie Energy Ltd (NYSE:GNE). This group of stocks’ market valuations are closest to Enzymotec Ltd (NASDAQ:ENZY)’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BCEI | 15 | 53754 | -3 |
| XRM | 9 | 33509 | -2 |
| UTMD | 4 | 21949 | -1 |
| GNE | 4 | 11419 | -1 |
As you can see, these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $30 million. That figure was $68 million in Enzymotec Ltd (NASDAQ:ENZY)’s case. Bonanza Creek Energy Inc (NYSE:BCEI) is the most popular stock in this table. On the other hand, Utah Medical Products, Inc. (NASDAQ:UTMD) is the least popular one with only 4 bullish hedge fund positions. Enzymotec Ltd (NASDAQ:ENZY) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Bonanza Creek Energy Inc (NYSE:BCEI) might be a better candidate to consider a long position.
