Hedge Funds Are Betting On Fifth Street Asset Management Inc (FSAM)

After several tireless days, we have finished crunching the numbers from more than 700 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Fifth Street Asset Management Inc (NASDAQ:FSAM).

Fifth Street Asset Management Inc (NASDAQ:FSAM) investors should pay attention to a slight increase in enthusiasm from smart money recently. Fifth Street Asset Management Inc (NASDAQ:FSAM) was in six hedge funds’ portfolios at the end of September. There were five hedge funds in our database with Fifth Street Asset Management Inc (NASDAQ:FSAM) 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 Columbus McKinnon Corp. (NASDAQ:CMCO), TubeMogul Inc (NASDAQ:TUBE), and Ascent Capital Group Inc (NASDAQ:ASCMA) to gather more data points.

To most stock holders, hedge funds are viewed as underperforming, old financial tools of years past. While there are more than 8000 funds in operation today, our experts choose to focus on the crème de la crème of this group, around 700 funds. Most estimates calculate that this group of people direct most of the smart money’s total asset base, and by paying attention to their top investments, Insider Monkey has determined many investment strategies that have historically beaten the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 12 percentage points annually for a decade in their back tests.

Now, we’re going to take a glance at the new action surrounding Fifth Street Asset Management Inc (NASDAQ:FSAM).

How have hedgies been trading Fifth Street Asset Management Inc (NASDAQ:FSAM)?

At the end of September, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 20% from one quarter earlier. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, David Einhorn’s Greenlight Capital has the most valuable position in Fifth Street Asset Management Inc (NASDAQ:FSAM), worth close to $4.4 million, comprising 0.1% of its total 13F portfolio. Coming in second is Mangrove Partners, managed by Nathaniel August, which holds an $3.7 million position; 0.9% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors that are bullish contain Chuck Royce’s Royce & Associates, Ari Zweiman’s 683 Capital Partners, and John Overdeck and David Siegel’s Two Sigma Advisors.

As aggregate interest increased, key hedge funds have jumped into Fifth Street Asset Management Inc (NASDAQ:FSAM) headfirst. Millennium Management, managed by Israel Englander, assembled the largest position in Fifth Street Asset Management Inc (NASDAQ:FSAM). Millennium Management had $0.1 million invested in the company at the end of the third quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Fifth Street Asset Management Inc (NASDAQ:FSAM) but similarly valued. We will take a look at Columbus McKinnon Corp. (NASDAQ:CMCO), TubeMogul Inc (NASDAQ:TUBE), Ascent Capital Group Inc (NASDAQ:ASCMA), and Park-Ohio Holdings Corp. (NASDAQ:PKOH). All of these stocks’ market caps resemble FSAM’s market cap.

As you can see, these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $61 million. Columbus McKinnon Corp. (NASDAQ:CMCO) is the most popular stock in this table, while Park-Ohio Holdings Corp. (NASDAQ:PKOH) is the least popular one with only six hedge funds reporting stakes. Fifth Street also has only six funds, but these funds held $13 million worth of its shares at the end of September. This may be a signal that Fifth Street is not the best choice for your portfolio at the moment. Even though, hedge funds don’t always get it right, we believe that the best approach is to look into stocks that hedge funds are collectively bullish on, such as CMCO in this case.