Hedge Funds Are Buying Harris Corporation (HRS)

You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make a proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.

Is Harris Corporation (NYSE:HRS) a buy right now? Prominent investors are turning bullish. The number of bullish hedge fund positions rose by 3 recently. At the end of this article we will also compare HRS to other stocks including Celanese Corporation (NYSE:CE), Cabot Oil & Gas Corporation (NYSE:COG), and Kohl’s Corporation (NYSE:KSS) to get a better sense of its popularity.

According to most investors, hedge funds are assumed to be underperforming, old financial tools of years past. While there are over 8000 funds in operation today, Our researchers hone in on the top tier of this club, approximately 700 funds. Most estimates calculate that this group of people watch over the majority of all hedge funds’ total capital, and by monitoring their unrivaled equity investments, Insider Monkey has deciphered many investment strategies that have historically outrun the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points per year for a decade in their back tests.

Keeping this in mind, we’re going to check out the recent action encompassing Harris Corporation (NYSE:HRS).

What have hedge funds been doing with Harris Corporation (NYSE:HRS)?

At the end of the third quarter, a total of 39 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 8% from the second quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exist a few noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

Of the funds tracked by Insider Monkey, OZ Management, managed by Daniel S. Och, holds the most valuable position in Harris Corporation (NYSE:HRS). OZ Management has a $356.2 million position in the stock, comprising 1.2% of its 13F portfolio. On OZ Management’s heels is D. E. Shaw of D E Shaw, with a $84.9 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other members of the smart money that hold long positions comprise Steve Cohen’s Point72 Asset Management, Jim Simons’s Renaissance Technologies and Phill Gross and Robert Atchinson’s Adage Capital Management.

As aggregate interest increased, some big names have jumped into Harris Corporation (NYSE:HRS) headfirst. BlueCrest Capital Mgmt., managed by Michael Platt and William Reeves, initiated the biggest position in Harris Corporation (NYSE:HRS). BlueCrest Capital Mgmt. had $6.7 million invested in the company at the end of the quarter. Chao Ku’s Nine Chapters Capital Management also initiated a $5.1 million position during the quarter. The other funds with new positions in the stock are Robert I. Usdan and Wayne K. Goldstein’s Endicott Management, David Costen Haley’s HBK Investments, and Mike Vranos’s Ellington.

Let’s also examine hedge fund activity in other stocks similar to Harris Corporation (NYSE:HRS). We will take a look at Celanese Corporation (NYSE:CE), Cabot Oil & Gas Corporation (NYSE:COG), Kohl’s Corporation (NYSE:KSS), and Hasbro, Inc. (NASDAQ:HAS). All of these stocks’ market caps are closest to HRS’s market cap.

As you can see these stocks had an average of 28 hedge funds with bullish positions and the average amount invested in these stocks was $396 million. That figure was $874 million in HRS’s case. Cabot Oil & Gas Corporation (NYSE:COG)) is the most popular stock in this table, while the least popular one is Hasbro, Inc. (NASDAQ:HAS). In comparison, Harris Corporation (NYSE:HRS) 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.