Hedge Funds Are Dumping INTL Fcstone Inc (INTL)

While the market driven by short-term sentiment influenced by uncertainty regarding the future of the interest rate environment in the US, the low commodity prices and the economic turmoil in China, many smart money investors are keeping their optimism regarding the current bull run, while still hedging many of their long positions. However, as we know, big investors usually buy stocks with strong fundamentals, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding INTL Fcstone Inc (NASDAQ:INTL).

INTL Fcstone Inc (NASDAQ:INTL) was in 14 hedge funds’ portfolios at the end of September. INTL Fcstone Inc (NASDAQ:INTL) investors should be aware of a decrease in hedge fund interest in recent months. There were 17 hedge funds in our database with INTL Fcstone Inc (NASDAQ:INTL) positions at the end of the previous quarter. It may not come as a surprise, as the shares of the company were experiencing a bearish market response during the third quarter, losing 25.72% value. In order to find out more about hedge fund behavior, we will cover hedge funds that held positions in INTL Fcstone Inc (NASDAQ:INTL), at the end of the last qaurter.

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 ChipMOS Technologies (Bermuda) Ltd (NASDAQ:IMOS), Chuy’s Holdings Inc (NASDAQ:CHUY), and Westwood Holdings Group, Inc. (NYSE:WHG) to gather more data points.

To the average investor, there are tons of formulas market participants can use to appraise their holdings. A pair of the best formulas are hedge fund and insider trading signals. We have shown that, historically, those who follow the top picks of the top investment managers can trounce the S&P 500 by a healthy amount (see the details here).

Now, let’s go over the fresh action regarding INTL Fcstone Inc (NASDAQ:INTL).

Hedge fund activity in INTL Fcstone Inc (NASDAQ:INTL)

At the end of September, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a decrease of 18% from the previous quarter. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Gregg J. Powers’s Private Capital Management has the most valuable position in INTL Fcstone Inc (NASDAQ:INTL), worth close to $29.8 million, corresponding to 3.5% of its total 13F portfolio. Sitting at the No. 2 spot is Nine Ten Partners, led by Brian Bares, Russell Mollen, and James Bradshaw, holding a $19.8 million position; 8.9% of its 13F portfolio is allocated to the company. Remaining members of the smart money that are bullish comprise Chuck Royce’s Royce & Associates, D E Shaw, and Cliff Asness’ AQR Capital Management.

Judging by the fact that INTL Fcstone Inc (NASDAQ:INTL) has faced a falling interest from the entirety of the hedge funds we track, we can see that there were a few funds that elected to cut their full holdings last quarter. Intriguingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital cut the largest stake of all the hedgies followed by Insider Monkey, comprising close to $1.2 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also said goodbye to its stock, about $0.4 million worth of shares. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 3 funds last quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as INTL Fcstone Inc (NASDAQ:INTL) but similarly valued. These stocks are ChipMOS Technologies (Bermuda) Ltd (NASDAQ:IMOS), Chuy’s Holdings Inc (NASDAQ:CHUY), Westwood Holdings Group, Inc. (NYSE:WHG), and Pengrowth Energy Corp (USA) (NYSE:PGH). This group of stocks’ market valuations match INTL Fcstone Inc (NASDAQ:INTL)’s market valuation.

As you can see, these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $78 million. That figure was $75 million in INTL Fcstone Inc (NASDAQ:INTL)’s case. ChipMOS Technologies (Bermuda) Ltd (NASDAQ:IMOS) is the most popular stock in this table. On the other hand, Westwood Holdings Group, Inc. (NYSE:WHG) is the least popular one with only 5 bullish hedge fund positions. INTL Fcstone Inc (NASDAQ:INTL) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, ChipMOS Technologies (Bermuda) Ltd (NASDAQ:IMOS) might be a better candidate to consider a long position.