Reputable billionaire investors such as Nelson Peltz and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won’t accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.
Comstock Resources Inc (NYSE:CRK) was in 8 hedge funds’ portfolios at the end of September. CRK investors should be aware of an increase in hedge fund sentiment lately. There were 2 hedge funds in our database with CRK holdings at the end of the previous quarter. At the end of this article we will also compare CRK to other stocks including Oncobiologics Inc (NASDAQ:ONS), magicJack VocalTec Ltd (NASDAQ:CALL), and Ashford Inc (NYSEMKT:AINC) to get a better sense of its popularity.
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Hedge fund activity in Comstock Resources Inc (NYSE:CRK)
At the end of the third quarter, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, up by 300% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CRK over the last 5 quarters. 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, Marc Lasry’s Avenue Capital holds the largest position in Comstock Resources Inc (NYSE:CRK). Avenue Capital has a $8.7 million position in the stock, comprising 1.8% of its 13F portfolio. The second most bullish fund manager is Jon Bauer’s Contrarian Capital which holds a $7.3 million position; 3.4% of its 13F portfolio is allocated to the stock. Remaining peers with similar optimism consist of William Michaelcheck’s Mariner Investment Group and Doug Silverman and Alexander Klabin’s Senator Investment Group. 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.
Now, some big names have been driving this bullishness. Avenue Capital established the biggest position in Comstock Resources Inc (NYSE:CRK) at the end of the quarter. Another fund with brand new CRK position is Senator Investment Group.
Let’s now review hedge fund activity in other stocks similar to Comstock Resources Inc (NYSE:CRK). We will take a look at Oncobiologics Inc (NASDAQ:ONS), magicJack VocalTec Ltd (NASDAQ:CALL), Ashford Inc (NYSEMKT:AINC), and Five Star Quality Care, Inc. (NYSE:FVE). All of these stocks’ market caps resemble CRK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ONS | 7 | 28337 | -1 |
| CALL | 6 | 5944 | -2 |
| AINC | 4 | 10454 | -1 |
| FVE | 8 | 15228 | -1 |
As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $15 million. That figure was $37 million in CRK’s case. Five Star Quality Care, Inc. (NYSE:FVE) is the most popular stock in this table. On the other hand Ashford Inc (NYSEMKT:AINC) is the least popular one with only 4 bullish hedge fund positions. Comstock Resources Inc (NYSE:CRK) 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. In this regard FVE might be a better candidate to consider taking a long position in.
Disclosure: None
