Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
Phoenix New Media Ltd ADR (NYSE:FENG) has seen an increase in support from the world’s most successful money managers of late. There were 8 hedge funds in our database with FENG positions at the end of the previous quarter, versus 10 at the end of Q3. At the end of this article we will also compare FENG to other stocks including Golden Entertainment Inc (NASDAQ:GDEN), Seneca Foods Corp (NASDAQ:SENEA), and Territorial Bancorp Inc (NASDAQ:TBNK) to get a better sense of its popularity.
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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Keeping this in mind, we’re going to go over the recent action regarding Phoenix New Media Ltd ADR (NYSE:FENG).
What have hedge funds been doing with Phoenix New Media Ltd ADR (NYSE:FENG)?
At Q3’s end, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 25% from the second quarter of 2016. On the other hand, there were a total of 8 hedge funds with a bullish position in FENG at the beginning of this year. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Charles de Vaulx of International Value Advisers holds the number one position in Phoenix New Media Ltd ADR (NYSE:FENG) which has a $16.2 million position in the stock. Coming in second is Renaissance Technologies, one of the largest hedge funds in the world, holding a $4.8 million position. Other hedge funds and institutional investors that hold long positions include Ernest Chow and Jonathan Howe’s Sensato Capital Management, D E Shaw and David Kowitz and Sheldon Kasowitz’s Indus Capital. We should note that two of these hedge funds (Sensato Capital Management and Indus Capital) 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, key money managers have been driving this bullishness. Israel Englander of Millennium Management established the most outsized position in Phoenix New Media Ltd ADR (NYSE:FENG). Millennium Management had $0.2 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $0.1 million position during the quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Phoenix New Media Ltd ADR (NYSE:FENG) but similarly valued. These stocks are Golden Entertainment Inc (NASDAQ:GDEN), Seneca Foods Corp (NASDAQ:SENEA), Territorial Bancorp Inc (NASDAQ:TBNK), and Golden Star Resources Ltd. (USA) (NYSEAMEX:GSS). All of these stocks’ market caps match FENG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GDEN | 10 | 30225 | 3 |
| SENEA | 7 | 13548 | 0 |
| TBNK | 5 | 18671 | 0 |
| GSS | 9 | 13576 | 5 |
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 $19 million. That figure was $25 million in FENG’s case. Golden Entertainment Inc (NASDAQ:GDEN) is the most popular stock in this table. On the other hand Territorial Bancorp Inc (NASDAQ:TBNK) is the least popular one with only 5 bullish hedge fund positions. Phoenix New Media Ltd ADR (NYSE:FENG) is the most popular stock in this group along with GDEN and that makes the stock worth a closer look.
Disclosure: None
