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 InterXion Holding NV (NYSE:INXN).
Is InterXion Holding NV (NYSE:INXN) a buy right now? Money managers are becoming hopeful. The number of bullish hedge fund positions went up by 4 recently. INXN was in 39 hedge funds’ portfolios at the end of September. There were 35 hedge funds in our database with INXN positions at the end of the previous quarter. 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 Nu Skin Enterprises, Inc. (NYSE:NUS), Ryman Hospitality Properties, Inc. (REIT) (NYSE:RHP), and WPX Energy Inc (NYSE:WPX) to gather more data points.
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.
Copyright: kgtoh / 123RF Stock Photo
With all of this in mind, we’re going to view the new action encompassing InterXion Holding NV (NYSE:INXN).
How are hedge funds trading InterXion Holding NV (NYSE:INXN)?
At the end of the third quarter, a total of 39 of the hedge funds tracked by Insider Monkey held long positions in this stock, an 11% upward move from the previous quarter. Ownership has remained relatively stable over the past three quarters after a surge in Q4 2015.With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Eminence Capital, managed by Ricky Sandler, holds the most valuable position in InterXion Holding NV (NYSE:INXN). Eminence Capital has a $164.1 million position in the stock, comprising 2.7% of its 13F portfolio. The second most bullish fund manager is Anand Parekh of Alyeska Investment Group, with a $98 million position; 1% of its 13F portfolio is allocated to the company. Other professional money managers with similar optimism include Barry Lebovits and Joshua Kuntz’s Rivulet Capital, D E Shaw, and Greg Poole’s Echo Street Capital Management.
As aggregate interest increased, specific money managers were leading the bulls’ herd. Folger Hill Asset Management, managed by Solomon Kumin, established the most valuable call position in InterXion Holding NV (NYSE:INXN). Folger Hill Asset Management had $14.5 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also made a $13.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Eduardo Abush’s Waterfront Capital Partners, John Croghan and Richard Fradin’s Rail-Splitter Capital Management, and Guru Ramakrishnan’s Meru Capital.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as InterXion Holding NV (NYSE:INXN) but similarly valued. We will take a look at Nu Skin Enterprises, Inc. (NYSE:NUS), Ryman Hospitality Properties, Inc. (REIT) (NYSE:RHP), WPX Energy Inc (NYSE:WPX), and Associated Banc Corp (NYSE:ASB). This group of stocks’ market caps match INXN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NUS | 23 | 213447 | 6 |
| RHP | 18 | 352245 | 0 |
| WPX | 33 | 676443 | -7 |
| ASB | 12 | 122108 | 1 |
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 $341 million. That figure was $923 million in INXN’s case. WPX Energy Inc (NYSE:WPX) is the most popular stock in this table. On the other hand Associated Banc Corp (NYSE:ASB) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks InterXion Holding NV (NYSE:INXN) 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
