Hedge Funds Are Dumping Intrepid Potash, Inc. (IPI)

Hedge funds and other investment firms that we track manage billions of dollars of their wealthy clients’ money, and needless to say, they are painstakingly thorough when analyzing where to invest this money, as their own wealth depends on it. Regardless of the various methods used by elite investors like David Tepper and Dan Loeb, the resources they expend are second-to-none. This is especially valuable when it comes to small-cap stocks, which is where they generate their strongest outperformance, as their resources give them a huge edge when it comes to studying these stocks compared to the average investor, which is why we intently follow their activity in the small-cap space.

Intrepid Potash, Inc. (NYSE:IPI) was in 13 hedge funds’ portfolios at the end of September. IPI shareholders have witnessed a decrease in support from the world’s most elite money managers of late. There were 15 hedge funds in our database with IPI holdings at the end of the previous quarter. 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 Homeowners Choice Inc (NYSE:HCI), Lakeland Bancorp, Inc. (NASDAQ:LBAI), and Eldorado Resorts Inc (NASDAQ:ERI) to gather more data points.

In the eyes of most stock holders, hedge funds are perceived as unimportant, outdated investment tools of yesteryear. While there are more than 8000 funds trading at the moment, Our experts hone in on the leaders of this club, approximately 700 funds. These hedge fund managers oversee the majority of all hedge funds’ total capital, and by watching their finest stock picks, Insider Monkey has come up with a few investment strategies that have historically outrun Mr. Market. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 12 percentage points per annum for a decade in their back tests.

Now, let’s take a look at the recent action surrounding Intrepid Potash, Inc. (NYSE:IPI).

Hedge fund activity in Intrepid Potash, Inc. (NYSE:IPI)

At the Q3’s end, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of -13% from one quarter earlier. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Rutabaga Capital Management, managed by Peter Schliemann, holds the largest position in Intrepid Potash, Inc. (NYSE:IPI). Rutabaga Capital Management has a $15.6 million position in the stock, comprising 1.9% of its 13F portfolio. On Rutabaga Capital Management’s heels is D. E. Shaw of D E Shaw, with a $3.6 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other members of the smart money with similar optimism consist of John Overdeck and David Siegel’s Two Sigma Advisors, Jim Simons’ Renaissance Technologies and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Seeing as Intrepid Potash, Inc. (NYSE:IPI) has witnessed a declination in interest from the aggregate hedge fund industry, it’s safe to say that there was a specific group of hedgies that decided to sell off their entire stakes in the third quarter. Intriguingly, Israel Englander’s Millennium Management dumped the largest stake of the 700 funds tracked by Insider Monkey, worth about $2.4 million in stock. Neil Chriss’ fund, Hutchin Hill Capital, also dropped its holding, about $1.4 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 2 funds in the third quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Intrepid Potash, Inc. (NYSE:IPI) but similarly valued. We will take a look at Homeowners Choice Inc (NYSE:HCI), Lakeland Bancorp, Inc. (NASDAQ:LBAI), Eldorado Resorts Inc (NASDAQ:ERI), and Green Plains Partners LP (NASDAQ:GPP). All of these stocks’ market caps are closest to IPI’s market cap.

As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $42 million, higher than the $26 million in IPI’s case. Eldorado Resorts Inc (NASDAQ:ERI) is the most popular stock in this table with a total of 12 funds reporting long positions. On the other hand Green Plains Partners LP (NASDAQ:GPP) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks, Intrepid Potash, Inc. (NYSE:IPI) 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.