There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other successful funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze SPX Corporation (NYSE:SPXC) .
Is SPX Corporation (NYSE:SPXC) a buy here? Money managers are actually in a pessimistic mood. The number of bullish hedge fund bets shrunk by 3 recently. SPXC was in 18 hedge funds’ portfolios at the end of September. There were 21 hedge funds in our database with SPXC positions at the end of the previous quarter. At the end of this article we will also compare SPXC to other stocks including Wingstop Inc (NASDAQ:WING), ICF International Inc (NASDAQ:ICFI), and AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG) to get a better sense of its popularity.
Follow Spx Technologies Inc. (NYSE:SPXC)
Follow Spx Technologies Inc. (NYSE:SPXC)
We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.
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Hedge fund activity in SPX Corporation (NYSE:SPXC)
At Q3’s end, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, down by 14% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards SPXC over the last 5 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Cliff Asness’ AQR Capital Management has the biggest position in SPX Corporation (NYSE:SPXC), worth close to $31.4 million. Sitting at the No. 2 spot is Jim Simons’ Renaissance Technologies holding a $18.3 million position. Some other peers that hold long positions consist of D. E. Shaw’s D E Shaw, Joel Greenblatt’s Gotham Asset Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. 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.
We already know that not all hedge funds are bullish on the stock and some hedge funds actually cashed in their positions entirely. Interestingly, Ira Unschuld’s Brant Point Investment Management cashed in the largest investment of all the hedgies followed by Insider Monkey, valued at an estimated $3.5 million in stock, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund dropped about $1.9 million worth of shares.
Let’s now review hedge fund activity in other stocks similar to SPX Corporation (NYSE:SPXC). These stocks are Wingstop Inc (NASDAQ:WING), ICF International Inc (NASDAQ:ICFI), AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG), and Klondex Mines Ltd (NYSE:KLDX). This group of stocks’ market values resemble SPXC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WING | 11 | 87301 | 3 |
| ICFI | 11 | 37753 | 2 |
| AMAG | 19 | 261026 | 0 |
| KLDX | 8 | 42753 | 1 |
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 $107 million. That figure was $109 million in SPXC’s case. AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG) is the most popular stock in this table. On the other hand Klondex Mines Ltd (NYSE:KLDX) is the least popular one with only 8 bullish hedge fund positions. SPX Corporation (NYSE:SPXC) 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 AMAG might be a better candidate to consider taking a long position in.
Disclosure: None
