Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is the small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we follow the hedge fund activity in the small-cap space.
Is Altisource Portfolio Solutions S.A. (NASDAQ:ASPS) a first-rate investment right now? Money managers are altogether betting on the stock. The number of long hedge fund investments rose by 3 in recent months. ASPSwas in 17 hedge funds’ portfolios at the end of September. There were 14 hedge funds in our database with ASPS holdings at the end of the previous quarter. At the end of this article we will also compare ASPS to other stocks including Mechel OAO (ADR) (NYSE:MTL), H&E Equipment Services, Inc. (NASDAQ:HEES), and Altisource Residential Corp (NYSE:RESI) to get a better sense of its popularity.
Follow Altisource Portfolio Solutions S.a. (NASDAQ:ASPS)
Follow Altisource Portfolio Solutions S.a. (NASDAQ:ASPS)
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, we’re going to go over the key action encompassing Altisource Portfolio Solutions S.A. (NASDAQ:ASPS).
How have hedgies been trading Altisource Portfolio Solutions S.A. (NASDAQ:ASPS)?
At Q3’s end, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 21% from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards ASPS over the last 5 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Omega Advisors, led by Leon Cooperman, holds the biggest position in Altisource Portfolio Solutions S.A. (NASDAQ:ASPS). According to regulatory filings, the fund has a $71.9 million position in the stock, comprising 2.2% of its 13F portfolio. On Omega Advisors’s heels is CQS Cayman LP, led by Michael Hintze, holding a $12.2 million position; the fund has 1% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that are bullish comprise Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Glenn Russell Dubin’s Highbridge Capital Management and Peter Muller’s PDT Partners. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
With a general bullishness amongst the heavyweights, specific money managers were leading the bulls’ herd. Highbridge Capital Management, led by Glenn Russell Dubin, created the largest position in Altisource Portfolio Solutions S.A. (NASDAQ:ASPS). According to regulatory filings, the fund had $2.5 million invested in the company at the end of the quarter. Lee Ainslie’s Maverick Capital also initiated a $1.1 million position during the quarter. The other funds with new positions in the stock are Ken Griffin’s Citadel Investment Group, Warren Lammert’s Granite Point Capital, and John Overdeck and David Siegel’s Two Sigma Advisors.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Altisource Portfolio Solutions S.A. (NASDAQ:ASPS) but similarly valued. These stocks are Mechel OAO (ADR) (NYSE:MTL), H&E Equipment Services, Inc. (NASDAQ:HEES), Altisource Residential Corp (NYSE:RESI), and Applied Micro Circuits Corporation (NASDAQ:AMCC). All of these stocks’ market caps match ASPS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MTL | 3 | 1299 | 0 |
| HEES | 14 | 30917 | 3 |
| RESI | 13 | 56390 | 7 |
| AMCC | 15 | 94512 | 1 |
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 $46 million. That figure was $102 million in ASPS’s case. Applied Micro Circuits Corporation (NASDAQ:AMCC) is the most popular stock in this table. On the other hand Mechel OAO (ADR) (NYSE:MTL) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Altisource Portfolio Solutions S.A. (NASDAQ:ASPS) 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.
