The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded XPEL Inc. (NASDAQ:XPEL) based on those filings.
Is XPEL Inc. (NASDAQ:XPEL) a buy, sell, or hold? Money managers are betting on the stock. The number of bullish hedge fund positions went up by 1 lately. Our calculations also showed that XPEL isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). XPEL was in 9 hedge funds’ portfolios at the end of the first quarter of 2020. There were 8 hedge funds in our database with XPEL positions at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
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 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Israel Englander of Millennium Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to take a look at the new hedge fund action regarding XPEL Inc. (NASDAQ:XPEL).
How are hedge funds trading XPEL Inc. (NASDAQ:XPEL)?
At Q1’s end, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards XPEL over the last 18 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Iszo Capital, managed by Brian Sheehy, holds the most valuable position in XPEL Inc. (NASDAQ:XPEL). Iszo Capital has a $14.6 million position in the stock, comprising 22.3% of its 13F portfolio. The second most bullish fund manager is C. Jonathan Gattman of Cloverdale Capital Management, with a $3.2 million position; the fund has 2.5% of its 13F portfolio invested in the stock. Remaining professional money managers with similar optimism encompass Israel Englander’s Millennium Management, Renaissance Technologies and Phil Frohlich’s Prescott Group Capital Management. In terms of the portfolio weights assigned to each position Iszo Capital allocated the biggest weight to XPEL Inc. (NASDAQ:XPEL), around 22.32% of its 13F portfolio. Cloverdale Capital Management is also relatively very bullish on the stock, earmarking 2.53 percent of its 13F equity portfolio to XPEL.
Consequently, key hedge funds have jumped into XPEL Inc. (NASDAQ:XPEL) headfirst. Cloverdale Capital Management, managed by C. Jonathan Gattman, created the most valuable position in XPEL Inc. (NASDAQ:XPEL). Cloverdale Capital Management had $3.2 million invested in the company at the end of the quarter. Renaissance Technologies also made a $0.6 million investment in the stock during the quarter. The other funds with brand new XPEL positions are Phil Frohlich’s Prescott Group Capital Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as XPEL Inc. (NASDAQ:XPEL) but similarly valued. These stocks are Chatham Lodging Trust (NYSE:CLDT), Napco Security Technologies Inc (NASDAQ:NSSC), Crescent Capital BDC, Inc. (NASDAQ:CCAP), and Cowen Inc. (NASDAQ:COWN). This group of stocks’ market values match XPEL’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CLDT | 8 | 19702 | -2 |
| NSSC | 5 | 2912 | -4 |
| CCAP | 5 | 38910 | 5 |
| COWN | 18 | 55296 | 0 |
| Average | 9 | 29205 | -0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $29 million. That figure was $21 million in XPEL’s case. Cowen Inc. (NASDAQ:COWN) is the most popular stock in this table. On the other hand Napco Security Technologies Inc (NASDAQ:NSSC) is the least popular one with only 5 bullish hedge fund positions. XPEL Inc. (NASDAQ:XPEL) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.4% in 2020 through June 22nd and still beat the market by 15.9 percentage points. A small number of hedge funds were also right about betting on XPEL as the stock returned 67.9% during the second quarter and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
