How Vicor Corp (VICR) Stands Up Against Its Peers

It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. The Standard and Poor’s 500 Index returned 7.6% over the 12-month period ending November 21, while more than 51% of the constituents of the index underperformed the benchmark. Hence, a random stock picking process will most likely lead to disappointment. At the same time, the 30 most favored mid-cap stocks by the best performing hedge funds monitored by Insider Monkey generated a return of 18% over the same time span. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in Vicor Corp (NASDAQ:VICR).

Is Vicor Corp (NASDAQ:VICR) a healthy stock for your portfolio? The best stock pickers are altogether becoming less confident. The number of long hedge fund positions that are disclosed in regulatory 13F filings fell by 2 in recent months. VICR was in 6 hedge funds’ portfolios at the end of September. There were 8 hedge funds in our database with VICR positions at the end of June. 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 Village Super Market, Inc. (NASDAQ:VLGEA), Sportsman’s Warehouse Holdings Inc (NASDAQ:SPWH), and NMI Holdings Inc (NASDAQ:NMIH) to gather more data points.

We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.

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What have hedge funds been doing with Vicor Corp (NASDAQ:VICR)?

Heading into the fourth quarter of 2016, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 25% decline from one quarter earlier. By comparison, 11 hedge funds held shares or bullish call options in VICR a year earlier, so smart money sentiment has fallen quite a bit in the last year. So, let’s find out 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, Richard Mashaal’s RIMA Senvest Management has the biggest position in Vicor Corp (NASDAQ:VICR), worth close to $8 million. Coming in second is Renaissance Technologies, one of the largest hedge funds in the world, which holds a $3.1 million position. Remaining members of the smart money that are bullish encompass Mario Gabelli’s GAMCO Investors, Adam Usdan’s Trellus Management Company, and John Overdeck and David Siegel’s Two Sigma Advisors. 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-micro-cap stocks.

Since Vicor Corp (NASDAQ:VICR) has faced falling interest from the smart money, we can see that there is a sect of hedge funds that slashed their entire stakes last quarter. At the top of the heap, Mark Broach’s Manatuck Hill Partners dumped the biggest investment of the 700 funds tracked by Insider Monkey, comprising an estimated $0.9 million in stock. Peter Algert and Kevin Coldiron’s fund, Algert Coldiron Investors, also cut its stock, about $0.3 million worth.

Let’s now take a look at hedge fund activity in other stocks similar to Vicor Corp (NASDAQ:VICR). We will take a look at Village Super Market, Inc. (NASDAQ:VLGEA), Sportsman’s Warehouse Holdings Inc (NASDAQ:SPWH), NMI Holdings Inc (NASDAQ:NMIH), and Armada Hoffler Properties Inc (NYSE:AHH). This group of stocks’ market valuations are similar to VICR’s market valuation.

As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $69 million. That figure was $15 million in VICR’s case. NMI Holdings Inc (NASDAQ:NMIH) is the most popular stock in this table. On the other hand Village Super Market, Inc. (NASDAQ:VLGEA) is the least popular one with only 5 bullish hedge fund positions. Vicor Corp (NASDAQ:VICR) 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 NMIH might be a better candidate to consider taking a long position in.

Disclosure: None