We at Insider Monkey have gone over 873 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th. In this article, we look at what those funds think of Insteel Industries Inc (NASDAQ:IIIN) based on that data.
Is Insteel Industries Inc (NASDAQ:IIIN) a bargain? The best stock pickers were getting less bullish. The number of long hedge fund positions were trimmed by 2 recently. Insteel Industries Inc (NASDAQ:IIIN) was in 10 hedge funds’ portfolios at the end of June. The all time high for this statistic is 19. Our calculations also showed that IIIN isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 12 hedge funds in our database with IIIN holdings at the end of March.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Michael Gelband of ExodusPoint Capital
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Do Hedge Funds Think IIIN Is A Good Stock To Buy Now?
At Q2’s end, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -17% from the first quarter of 2020. By comparison, 8 hedge funds held shares or bullish call options in IIIN a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
Among these funds, Royce & Associates held the most valuable stake in Insteel Industries Inc (NASDAQ:IIIN), which was worth $14.8 million at the end of the second quarter. On the second spot was Arrowstreet Capital which amassed $4.5 million worth of shares. Value Holdings LP, AQR Capital Management, and Two Sigma Advisors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Value Holdings LP allocated the biggest weight to Insteel Industries Inc (NASDAQ:IIIN), around 0.43% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, dishing out 0.1 percent of its 13F equity portfolio to IIIN.
Seeing as Insteel Industries Inc (NASDAQ:IIIN) has faced declining sentiment from the entirety of the hedge funds we track, logic holds that there were a few money managers that decided to sell off their positions entirely in the second quarter. At the top of the heap, Matthew Hulsizer’s PEAK6 Capital Management dropped the biggest position of the “upper crust” of funds watched by Insider Monkey, valued at an estimated $0.7 million in stock. Michael Gelband’s fund, ExodusPoint Capital, also cut its stock, about $0.3 million worth. These moves are important to note, as total hedge fund interest dropped by 2 funds in the second quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Insteel Industries Inc (NASDAQ:IIIN). We will take a look at Glatfelter Corp (NYSE:GLT), CarLotz, Inc. (NASDAQ:LOTZ), Uranium Energy Corp. (NYSE:UEC), Luther Burbank Corporation (NASDAQ:LBC), SOS Limited (NYSE:SOS), Pharvaris N.V. (NASDAQ:PHVS), and Gossamer Bio, Inc. (NASDAQ:GOSS). All of these stocks’ market caps resemble IIIN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GLT | 12 | 44990 | 4 |
| LOTZ | 16 | 48006 | -3 |
| UEC | 14 | 9062 | 7 |
| LBC | 6 | 6983 | 0 |
| SOS | 3 | 2096 | -3 |
| PHVS | 8 | 83438 | -3 |
| GOSS | 18 | 125697 | -1 |
| Average | 11 | 45753 | 0.1 |
View table here if you experience formatting issues.
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 $26 million in IIIN’s case. Gossamer Bio, Inc. (NASDAQ:GOSS) is the most popular stock in this table. On the other hand SOS Limited (NYSE:SOS) is the least popular one with only 3 bullish hedge fund positions. Insteel Industries Inc (NASDAQ:IIIN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for IIIN is 42.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 25.7% in 2021 through September 27th and still beat the market by 6.2 percentage points. A small number of hedge funds were also right about betting on IIIN as the stock returned 23.3% since the end of the second quarter (through 9/27) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
