Investors Are Abuzz About ARRIS International PLC (ARRS)

You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.

ARRIS International PLC (NASDAQ:ARRS) was in 39 hedge funds’ portfolios at the end of September. ARRS shareholders have witnessed an increase in enthusiasm from smart money in recent months. There were 36 hedge funds in our database with ARRS holdings 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 Validus Holdings, Ltd. (NYSE:VR), Bright Horizons Family Solutions Inc (NYSE:BFAM), and DCP Midstream Partners, LP (NYSE:DPM) 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.

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With all of this in mind, we’re going to go over the latest action surrounding ARRIS International PLC (NASDAQ:ARRS).

Hedge fund activity in ARRIS International PLC (NASDAQ:ARRS)

At the end of the third quarter, a total of 39 of the hedge funds tracked by Insider Monkey were long this stock, an 8% uptick from the second quarter of 2016, which followed a sharp boost in the second quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Eminence Capital, managed by Ricky Sandler, holds the most valuable position in ARRIS International PLC (NASDAQ:ARRS). Eminence Capital has a $214.3 million position in the stock, comprising 3.6% of its 13F portfolio. On Eminence Capital’s heels is Valinor Management LLC, managed by David Gallo, which holds a $98.7 million position; 3.4% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors with similar optimism comprise Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC, Josh Resnick’s Jericho Capital Asset Management and Ryan Frick and Oliver Evans’ Dorsal Capital Management.

With general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. Whale Rock Capital Management, managed by Alex Sacerdote, created the biggest position in ARRIS International PLC (NASDAQ:ARRS). Whale Rock Capital Management had $47.9 million invested in the company at the end of the quarter. Glenn J. Krevlin’s Glenhill Advisors also initiated a $35.6 million position during the quarter. The following funds were also among the new ARRS investors: Bain Capital’s Brookside Capital, Neal Shah’s Valtura Capital Partners, and James Dinan’s York Capital Management.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as ARRIS International PLC (NASDAQ:ARRS) but similarly valued. We will take a look at Validus Holdings, Ltd. (NYSE:VR), Bright Horizons Family Solutions Inc (NYSE:BFAM), DCP Midstream Partners, LP (NYSE:DPM), and Pool Corporation (NASDAQ:POOL). This group of stocks’ market values are closest to ARRS’s market value.

As you can see these stocks had an average of 15.75 hedge funds with bullish positions and the average amount invested in these stocks was $134 million. That figure was $1.25 billion in ARRS’s case. Pool Corporation (NASDAQ:POOL) is the most popular stock in this table. On the other hand DCP Midstream Partners, LP (NYSE:DPM) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks ARRIS International PLC (NASDAQ:ARRS) is more popular among hedge funds and gaining in popularity with each passing quarter. It also has far more money invested in it than any of the other stocks on the table do. 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