The government requires hedge funds and wealthy investors that crossed the $100 million equity holdings threshold are required to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31. We at Insider Monkey have made an extensive database of nearly 750 of those elite funds and famous investors’ filings. In this article, we analyze how these elite funds and prominent investors traded SP Plus Corp (NASDAQ:SP) based on those filings.
SP Plus Corp (NASDAQ:SP) was in 14 hedge funds’ portfolios at the end of the first quarter of 2019. SP investors should pay attention to an increase in support from the world’s most elite money managers lately. There were 12 hedge funds in our database with SP holdings at the end of the previous quarter. Our calculations also showed that SP 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 40 percentage points since May 2014 through May 30, 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 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to review the latest hedge fund action regarding SP Plus Corp (NASDAQ:SP).
How are hedge funds trading SP Plus Corp (NASDAQ:SP)?
At the end of the first quarter, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from one quarter earlier. On the other hand, there were a total of 16 hedge funds with a bullish position in SP a year ago. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
Among these funds, P2 Capital Partners held the most valuable stake in SP Plus Corp (NASDAQ:SP), which was worth $38.6 million at the end of the first quarter. On the second spot was Renaissance Technologies which amassed $18.2 million worth of shares. Moreover, Lionstone Capital Management, AQR Capital Management, and Intrepid Capital Management were also bullish on SP Plus Corp (NASDAQ:SP), allocating a large percentage of their portfolios to this stock.
With a general bullishness amongst the heavyweights, key money managers were leading the bulls’ herd. Intrepid Capital Management, managed by Mark Travis, created the most valuable position in SP Plus Corp (NASDAQ:SP). Intrepid Capital Management had $6.8 million invested in the company at the end of the quarter. David Harding’s Winton Capital Management also made a $0.4 million investment in the stock during the quarter.
Let’s go over hedge fund activity in other stocks similar to SP Plus Corp (NASDAQ:SP). These stocks are Duluth Holdings Inc. (NASDAQ:DLTH), Cara Therapeutics Inc (NASDAQ:CARA), Seacor Holdings, Inc. (NYSE:CKH), and Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH). This group of stocks’ market caps resemble SP’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DLTH | 12 | 10556 | 4 |
| CARA | 8 | 16562 | -1 |
| CKH | 11 | 122642 | -5 |
| RUTH | 15 | 64794 | -2 |
| Average | 11.5 | 53639 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.5 hedge funds with bullish positions and the average amount invested in these stocks was $54 million. That figure was $102 million in SP’s case. Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH) is the most popular stock in this table. On the other hand Cara Therapeutics Inc (NASDAQ:CARA) is the least popular one with only 8 bullish hedge fund positions. SP Plus Corp (NASDAQ:SP) 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately SP wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on SP were disappointed as the stock returned -5% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
