The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider Solar Capital Ltd. (NASDAQ:SLRC) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is Solar Capital Ltd. (NASDAQ:SLRC) undervalued? Investors who are in the know are turning less bullish. The number of long hedge fund positions decreased by 3 recently. Solar Capital Ltd. (NASDAQ:SLRC) was in 14 hedge funds’ portfolios at the end of September. There were 17 hedge funds in our database with Solar Capital Ltd. (NASDAQ:SLRC) holdings at the end of the previous quarter. The stock performance of the company was in alignment with the hedge fund behavior, with its stock losing 12.11% value throughout the quarter. We will discuss more about hedge funds that held positions in Solar Capital Ltd. (NASDAQ:SLRC), 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 Team, Inc. (NYSE:TISI), Live Oak Bancshares Inc (NASDAQ:LOB), and Gigamon Inc (NYSE:GIMO) to gather more data points.
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In the 21st century investor’s toolkit, there are tons of gauges stock market investors use to assess their holdings. A couple of the best gauges are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the top picks of the elite money managers can outpace the broader indices by a very impressive margin (see the details here).
Keeping this in mind, we’re going to analyze the fresh action regarding Solar Capital Ltd. (NASDAQ:SLRC).
What have hedge funds been doing with Solar Capital Ltd. (NASDAQ:SLRC)?
At the end of Q3, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a decline of 18% from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Charles Clough’s Clough Capital Partners has the most valuable position in Solar Capital Ltd. (NASDAQ:SLRC), worth close to $7.1 million, corresponding to 0.3% of its total 13F portfolio. Sitting at the No. 2 spot is Cloud Gate Capital, led by Brian Newman and David Heller, holding a $6.3 million position; 3.1% of its 13F portfolio is allocated to the company. Other peers that are bullish contain Brian Ashford-Russell and Tim Woolley’s Polar Capital, Israel Englander’s Millennium Management, and Ken Griffin’s Citadel Investment Group.
Since Solar Capital Ltd. (NASDAQ:SLRC) has experienced a declination in interest from hedge fund managers, it’s easy to see that there is a sect of funds that slashed their positions entirely heading into Q4. At the top of the heap, Brian Taylor’s Pine River Capital Management said goodbye to the biggest investment of all the hedgies tracked by Insider Monkey, valued at close to $0.7 million in stock. Paul Tudor Jones’s fund, Tudor Investment Corp, also said goodbye to its stock, about $0.2 million worth of shares. These moves are important to note, as aggregate hedge fund interest dropped by 3 funds heading into Q4.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Solar Capital Ltd. (NASDAQ:SLRC) but similarly valued. We will take a look at Team, Inc. (NYSE:TISI), Live Oak Bancshares Inc (NASDAQ:LOB), Gigamon Inc (NYSE:GIMO), and Kulicke and Soffa Industries Inc. (NASDAQ:KLIC). This group of stocks’ market caps resemble Solar Capital Ltd. (NASDAQ:SLRC)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TISI | 15 | 74130 | 5 |
| LOB | 8 | 26798 | 8 |
| GIMO | 24 | 104657 | 0 |
| KLIC | 16 | 55659 | 1 |
As you can see, these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $65 million. That figure was $41 million in Solar Capital Ltd. (NASDAQ:SLRC)’s case. Gigamon Inc (NYSE:GIMO) is the most popular stock in this table. On the other hand, Live Oak Bancshares Inc (NASDAQ:LOB) is the least popular one with only 8 bullish hedge fund positions. Solar Capital Ltd. (NASDAQ:SLRC) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Gigamon Inc (NYSE:GIMO) might be a better candidate to consider a long position.
