“Since 2006, value stocks (IVE vs IVW) have underperformed 11 of the 13 calendar years and when they beat growth, it wasn’t by much. Cumulatively, through this week, it has been a 122% differential (up 52% for value vs up 174% for growth). This appears to be the longest and most severe drought for value investors since data collection began. It will go our way eventually as there are too many people paying far too much for today’s darlings, both public and private. Further, the ten-year yield of 2.5% (pre-tax) isn’t attractive nor is real estate. We believe the value part of the global equity market is the only place to earn solid risk adjusted returns and we believe those returns will be higher than normal,” said Vilas Fund in its Q1 investor letter. We aren’t sure whether value stocks outperform growth, but we follow hedge fund investor letters to understand where the markets and stocks might be going. That’s why we believe it would be worthwhile to take a look at the hedge fund sentiment on Virtus Investment Partners Inc (NASDAQ:VRTS) in order to identify whether reputable and successful top money managers continue to believe in its potential.
Virtus Investment Partners Inc (NASDAQ:VRTS) was in 15 hedge funds’ portfolios at the end of March. VRTS shareholders have witnessed an increase in hedge fund interest lately. There were 11 hedge funds in our database with VRTS positions at the end of the previous quarter. Our calculations also showed that VRTS isn’t among the 30 most popular stocks among hedge funds.
To the average investor there are plenty of gauges market participants can use to analyze publicly traded companies. Two of the most underrated gauges are hedge fund and insider trading moves. We have shown that, historically, those who follow the top picks of the best money managers can beat their index-focused peers by a significant margin (see the details here).
We’re going to take a look at the key hedge fund action regarding Virtus Investment Partners Inc (NASDAQ:VRTS).
How have hedgies been trading Virtus Investment Partners Inc (NASDAQ:VRTS)?
At the end of the first quarter, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 36% from the fourth quarter of 2018. On the other hand, there were a total of 14 hedge funds with a bullish position in VRTS a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Mangrove Partners, managed by Nathaniel August, holds the number one position in Virtus Investment Partners Inc (NASDAQ:VRTS). Mangrove Partners has a $29.3 million position in the stock, comprising 3.9% of its 13F portfolio. On Mangrove Partners’s heels is Noah Levy and Eugene Dozortsev of Newtyn Management, with a $14.8 million position; the fund has 2.8% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that hold long positions encompass D. E. Shaw’s D E Shaw, Joe Huber’s Huber Capital Management and Ken Griffin’s Citadel Investment Group.
As one would reasonably expect, specific money managers were leading the bulls’ herd. Millennium Management, managed by Israel Englander, created the biggest position in Virtus Investment Partners Inc (NASDAQ:VRTS). Millennium Management had $2.7 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $1.8 million position during the quarter. The following funds were also among the new VRTS investors: Andrew Weiss’s Weiss Asset Management, Cliff Asness’s AQR Capital Management, and Mike Vranos’s Ellington.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Virtus Investment Partners Inc (NASDAQ:VRTS) but similarly valued. These stocks are Nine Energy Service, Inc. (NYSE:NINE), United Insurance Holdings Corp.(NDA) (NASDAQ:UIHC), Fossil Group Inc (NASDAQ:FOSL), and Sabine Royalty Trust (NYSE:SBR). This group of stocks’ market caps are similar to VRTS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NINE | 10 | 42516 | 0 |
| UIHC | 7 | 8100 | 1 |
| FOSL | 17 | 80499 | -1 |
| SBR | 6 | 24252 | 0 |
| Average | 10 | 38842 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $39 million. That figure was $92 million in VRTS’s case. Fossil Group Inc (NASDAQ:FOSL) is the most popular stock in this table. On the other hand Sabine Royalty Trust (NYSE:SBR) is the least popular one with only 6 bullish hedge fund positions. Virtus Investment Partners Inc (NASDAQ:VRTS) is not the most popular stock in this group but hedge fund interest is still above average. 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. Hedge funds were also right about betting on VRTS as the stock returned 7.3% during the same period and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
