Infinera Corp. (INFN): Are Hedge Funds Right About This Stock?

Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those elite funds in these small-cap stocks. In the following paragraphs, we analyze Infinera Corp. (NASDAQ:INFN) from the perspective of those elite funds.

Infinera Corp. (NASDAQ:INFN) investors should be aware of an increase in support from the world’s most elite money managers recently. 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 Clean Harbors Inc (NYSE:CLH), World Fuel Services Corporation (NYSE:INT), and Myriad Genetics, Inc. (NASDAQ:MYGN) to gather more data points.

With all of this in mind, let’s take a glance at the recent action encompassing Infinera Corp. (NASDAQ:INFN).

Hedge fund activity in Infinera Corp. (NASDAQ:INFN)

Heading into Q4, a total of 31 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 24% from the previous quarter. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Columbus Circle Investors has the most valuable position in Infinera Corp. (NASDAQ:INFN), worth close to $49.9 million, accounting for 0.4% of its total 13F portfolio. The second largest stake is held by Jericho Capital Asset Management, led by Josh Resnick, holding a $46.3 million position; the fund has 2.9% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism consist of William Harnisch’s Peconic Partners LLC, Leon Shaulov’s Maplelane Capital and Drew Cupps’s Cupps Capital Management.

With a general bullishness amongst the heavyweights, key hedge funds have jumped into Infinera Corp. (NASDAQ:INFN) headfirst. Alyeska Investment Group, managed by Anand Parekh, initiated the most outsized position in Infinera Corp. (NASDAQ:INFN). Alyeska Investment Group had $4.8 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also made a $4.3 million investment in the stock during the quarter. The following funds were also among the new INFN investors: Peter Muller’s PDT Partners, Neil Chriss’ Hutchin Hill Capital, and Paul Marshall and Ian Wace’s Marshall Wace LLP.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Infinera Corp. (NASDAQ:INFN) but similarly valued. We will take a look at Clean Harbors Inc (NYSE:CLH), World Fuel Services Corporation (NYSE:INT), Myriad Genetics, Inc. (NASDAQ:MYGN), and TCF Financial Corporation (NYSE:TCB). All of these stocks’ market caps are closest to INFN’s market cap.

As you can see these stocks had an average of 21.5 hedge funds with bullish positions and the average amount invested in these stocks was $334 million. That figure was $259 million in INFN’s case. Clean Harbors Inc (NYSE:CLH) is the most popular stock in this table. On the other hand Myriad Genetics, Inc. (NASDAQ:MYGN) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks Infinera Corp. (NASDAQ:INFN) 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.