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 Jeff Ubben, George Soros and Carl Icahn 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 elite funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze Emerald Expositions Events, Inc. (NYSE:EEX).
Emerald Expositions Events, Inc. (NYSE:EEX) investors should be aware of an increase in support from the world’s most elite money managers in recent months. EEX was in 11 hedge funds’ portfolios at the end of the fourth quarter of 2018. There were 10 hedge funds in our database with EEX holdings at the end of the previous quarter. Our calculations also showed that eex isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s view the new hedge fund action surrounding Emerald Expositions Events, Inc. (NYSE:EEX).
Hedge fund activity in Emerald Expositions Events, Inc. (NYSE:EEX)
At the end of the fourth quarter, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 10% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards EEX over the last 14 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Marshall Wace LLP was the largest shareholder of Emerald Expositions Events, Inc. (NYSE:EEX), with a stake worth $4.5 million reported as of the end of December. Trailing Marshall Wace LLP was D E Shaw, which amassed a stake valued at $1.3 million. Citadel Investment Group, Two Sigma Advisors, and GLG Partners were also very fond of the stock, giving the stock large weights in their portfolios.
Now, some big names have been driving this bullishness. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the most outsized position in Emerald Expositions Events, Inc. (NYSE:EEX). Marshall Wace LLP had $4.5 million invested in the company at the end of the quarter. Minhua Zhang’s Weld Capital Management also initiated a $0.3 million position during the quarter. The other funds with brand new EEX positions are Israel Englander’s Millennium Management and Cliff Asness’s AQR Capital Management.
Let’s also examine hedge fund activity in other stocks similar to Emerald Expositions Events, Inc. (NYSE:EEX). We will take a look at Codexis, Inc. (NASDAQ:CDXS), Trueblue Inc (NYSE:TBI), Lattice Semiconductor Corporation (NASDAQ:LSCC), and Genesco Inc. (NYSE:GCO). This group of stocks’ market values match EEX’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CDXS | 13 | 276255 | 1 |
| TBI | 15 | 61257 | 1 |
| LSCC | 22 | 139452 | 4 |
| GCO | 22 | 97395 | 3 |
| Average | 18 | 143590 | 2.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $144 million. That figure was $9 million in EEX’s case. Lattice Semiconductor Corporation (NASDAQ:LSCC) is the most popular stock in this table. On the other hand Codexis, Inc. (NASDAQ:CDXS) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Emerald Expositions Events, Inc. (NYSE:EEX) is even less popular than CDXS. Hedge funds dodged a bullet by taking a bearish stance towards EEX. Our calculations showed that the top 15 most popular hedge fund stocks returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately EEX wasn’t nearly as popular as these 15 stock (hedge fund sentiment was very bearish); EEX investors were disappointed as the stock returned 10.3% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
