Hedge funds run by legendary names like Nelson Peltz and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources on analyzing and uncovering data about small-cap stocks that the big brokerage houses don’t follow. Small caps are where they can generate significant out-performance. These stocks have been on a tear since the end of June, outperforming large-cap index funds by more than 10 percentage points. That’s why we pay special attention to hedge fund activity in these stocks.
Is Bitauto Hldg Ltd (ADR) (NYSE:BITA) worth your attention right now? Prominent investors are indeed becoming more confident. The number of bullish hedge fund investments moved up by 2 lately. BITA was in 13 hedge funds’ portfolios at the end of the third quarter of 2016. There were 11 hedge funds in our database with BITA 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 National Beverage Corp. (NASDAQ:FIZZ), Party City Holdco Inc (NYSE:PRTY), and Synaptics, Incorporated (NASDAQ:SYNA) to gather more data points.
Follow Bitauto Holdings Ltd (NYSE:BITA)
Follow Bitauto Holdings Ltd (NYSE:BITA)
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What does the smart money think about Bitauto Hldg Ltd (ADR) (NYSE:BITA)?
At the end of the third quarter, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, an 18% increase from the previous quarter, and the third quarter in a row in which the number of bullish hedge fund positions has increased. Below, you can check out the change in hedge fund sentiment towards BITA over the last 5 quarters. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, William von Mueffling’s Cantillon Capital Management has the biggest position in Bitauto Hldg Ltd (ADR) (NYSE:BITA), worth close to $81 million, accounting for 1.1% of its total 13F portfolio. On Cantillon Capital Management’s heels is Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, with a $16.4 million position. Some other professional money managers that are bullish include Fang Zheng’s Keywise Capital Management, Thomas E. Claugus’ GMT Capital, and George Soros’ Soros Fund Management. We should note that Soros Fund Management is 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.
As industry-wide interest jumped, key money managers have jumped into Bitauto Hldg Ltd (ADR) (NYSE:BITA) headfirst. Millennium Management, one of the 10 largest hedge funds in the world, created the largest position in Bitauto Hldg Ltd (ADR) (NYSE:BITA). Millennium Management had $2.1 million invested in the company at the end of the quarter. Charles Davidson’s Wexford Capital also made a $1.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Ken Griffin’s Citadel Investment Group, Cliff Asness’ AQR Capital Management, and Simon Sadler’s Segantii Capital.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Bitauto Hldg Ltd (ADR) (NYSE:BITA) but similarly valued. These stocks are National Beverage Corp. (NASDAQ:FIZZ), Party City Holdco Inc (NYSE:PRTY), Synaptics, Incorporated (NASDAQ:SYNA), and LTC Properties Inc (NYSE:LTC). All of these stocks’ market caps resemble BITA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FIZZ | 20 | 146113 | 11 |
| PRTY | 9 | 35917 | 2 |
| SYNA | 21 | 206919 | -3 |
| LTC | 5 | 10170 | -1 |
As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $100 million. That figure was $117 million in BITA’s case. Synaptics, Incorporated (NASDAQ:SYNA) is the most popular stock in this table. On the other hand LTC Properties Inc (NYSE:LTC) is the least popular one with only 5 bullish hedge fund positions. Bitauto Hldg Ltd (ADR) (NYSE:BITA) 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 recently. In this regard FIZZ might be a better candidate to consider taking a long position in.
Disclosure: None
