Hedge funds run by legendary names like Nelson Peltz and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources on analyzing and uncovering data about small-cap stocks that the big brokerage houses don’t follow. Small caps are where they can generate significant out-performance. That’s why we pay special attention to hedge fund activity in these stocks.
Huron Consulting Group (NASDAQ:HURN) has experienced an increase in hedge fund sentiment in recent months. At the end of this article we will also compare HURN to other stocks, including Pattern Energy Group Inc (NASDAQ:PEGI), Ladder Capital Corp (NYSE:LADR), and Houlihan Lokey Inc (NYSE:HLI) to get a better sense of its popularity.
Follow Huron Consulting Group Inc. (NASDAQ:HURN)
Follow Huron Consulting Group Inc. (NASDAQ:HURN)
In the eyes of most shareholders, hedge funds are viewed as slow, old investment tools of yesteryear. While there are more than 8000 funds in operation at present, Our experts hone in on the top tier of this group, around 700 funds. These hedge fund managers control most of the hedge fund industry’s total asset base, and by tailing their first-class investments, Insider Monkey has unearthed several investment strategies that have historically defeated the market. Insider Monkey’s small-cap hedge fund strategy outrun the S&P 500 index by 12 percentage points per annum for a decade in their back tests.
With all of this in mind, let’s take a look at the fresh action regarding Huron Consulting Group (NASDAQ:HURN).
Hedge fund activity in Huron Consulting Group (NASDAQ:HURN)
At the end of the third quarter, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 23% from the second quarter. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Lee Munder’s Lee Munder Capital Group has the number one position in Huron Consulting Group (NASDAQ:HURN), worth close to $21.8 million, amounting to 0.5% of its total 13F portfolio. The second largest stake is held by Three Corner Global Investors, managed by Gunnar Overstrom, which holds an $11.9 million position; the fund has 4.3% of its 13F portfolio invested in the stock. Some other members of the smart money with similar optimism consist of Glenn Russell Dubin’s Highbridge Capital Management, Brian Taylor’s Pine River Capital Management and Israel Englander’s Millennium Management.
As one would reasonably expect, key money managers were leading the bulls’ herd. Highbridge Capital Management created the most outsized position in Huron Consulting Group (NASDAQ:HURN). The fund had $6.5 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $4.6 million position during the quarter. The other funds with brand new HURN positions are D. E. Shaw’s D E Shaw, Neil Chriss’ Hutchin Hill Capital, and Chao Ku’s Nine Chapters Capital Management.
Let’s also examine hedge fund activity in other stocks similar to Huron Consulting Group (NASDAQ:HURN). We will take a look at Pattern Energy Group Inc (NASDAQ:PEGI), Ladder Capital Corp (NYSE:LADR), Houlihan Lokey Inc (NYSE:HLI), and Jumei International Holding Ltd (ADR) (NYSE:JMEI). This group of stocks’ market values are closest to HURN’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PEGI | 13 | 183672 | -3 |
| LADR | 13 | 73515 | -2 |
| HLI | 13 | 66307 | 13 |
| JMEI | 13 | 32592 | -2 |
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 $89 million. That figure was $68 million in HURN’s case. Coincidentally, all four stocks from this group had 13 long hedge fund positions at the end of the quarter, but they were no match for Huron Consulting Group (NASDAQ:HURN) with 16 positions. 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.
