At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.
In this article, we are going to take a closer look at Jones Energy Inc (NYSE:JONE). Overall, the stock didn’t see a lot of action during the third quarter and the hedge fund sentiment was unchanged. The stock was in 12 hedge funds’ portfolios at the end of September. At the end of this article we will also compare JONE to other stocks including INVUITY INC COM USD0.001 (NASDAQ:IVTY), Alico, Inc. (NASDAQ:ALCO), and Nathan’s Famous, Inc. (NASDAQ:NATH) to get a better sense of its popularity.
Follow Jones Energy Inc. (INDEXDJX:JONE)
Follow Jones Energy Inc. (INDEXDJX:JONE)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Keeping this in mind, we’re going to check out the new action regarding Jones Energy Inc (NYSE:JONE).
What does the smart money think about Jones Energy Inc (NYSE:JONE)?
At Q3’s end, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, unchanged over the quarter. By comparison, three hedge funds held shares or bullish call options in JONE heading into this year. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Steve Cohen’s Point72 Asset Management has the most valuable position in Jones Energy Inc (NYSE:JONE), worth close to $11.3 million, accounting for 0.1% of its total 13F portfolio. Coming in second is Magnetar Capital, led by Alec Litowitz and Ross Laser, holding a $6.5 million position; 0.1% of its 13F portfolio is allocated to the company. Some other members of the smart money that are bullish include Stanley Shopkorn and Douglas Day’s Hilltop Park Associates, Millennium Management, one of the 10 largest hedge funds in the world, and Cliff Asness’ AQR Capital Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Due to the fact that Jones Energy Inc (NYSE:JONE) has weathered declining sentiment from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of hedge funds that elected to cut their full holdings in the third quarter. Intriguingly, Geoffrey Raynor’s Q Investments (Specter Holdings) dumped the biggest investment of all the hedgies monitored by Insider Monkey, valued at an estimated $1.1 million in stock, and Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk’s GRT Capital Partners was right behind this move, as the fund dropped about $0.1 million worth of shares.
Let’s also examine hedge fund activity in other stocks similar to Jones Energy Inc (NYSE:JONE). These stocks are INVUITY INC COM USD0.001 (NASDAQ:IVTY), Alico, Inc. (NASDAQ:ALCO), Nathan’s Famous, Inc. (NASDAQ:NATH), and Cascadian Therapeutics Inc (USA) (NASDAQ:CASC). This group of stocks’ market values are similar to JONE’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| IVTY | 11 | 45090 | 5 |
| ALCO | 6 | 37250 | 0 |
| NATH | 5 | 28177 | -1 |
| CASC | 11 | 88603 | -3 |
As you can see these stocks had an average of eight funds with bullish positions and the average amount invested in these stocks was $50 million. That figure was $24 million in JONE’s case. INVUITY INC COM USD0.001 (NASDAQ:IVTY) and Cascadian Therapeutics Inc (USA) (NASDAQ:CASC) are the most popular stocks in this table. On the other hand Nathan’s Famous, Inc. (NASDAQ:NATH) is the least popular one with only five bullish hedge fund positions. Compared to these stocks Jones Energy Inc (NYSE:JONE) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: none
