Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
Boingo Wireless Inc (NASDAQ:WIFI) has seen a decrease in activity from the world’s largest hedge funds in recent months. WIFI was in 15 hedge funds’ portfolios at the end of the third quarter of 2016. There were 16 hedge funds in our database with WIFI holdings at the end of the previous quarter. At the end of this article we will also compare WIFI to other stocks including Culp, Inc. (NYSE:CFI), Del Frisco’s Restaurant Group Inc (NASDAQ:DFRG), and Sinovac Biotech Ltd. (NASDAQ:SVA) to get a better sense of its popularity.
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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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What does the smart money think about Boingo Wireless Inc (NASDAQ:WIFI)?
At the end of the third quarter, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a 6% dip from the previous quarter. Below, you can check out the change in hedge fund sentiment towards WIFI over the last 5 quarters, which has remained in a relatively narrow range. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Park West Asset Management, led by Peter S. Park, holds the most valuable position in Boingo Wireless Inc (NASDAQ:WIFI). Park West Asset Management has a $20.9 million position in the stock, comprising 1.9% of its 13F portfolio. The second largest stake is held by Renaissance Technologies, founded by Jim Simons, which holds a $14.9 million position. Other professional money managers that are bullish contain Amy Minella’s Cardinal Capital, Chuck Royce’s Royce & Associates, and Charles Paquelet’s Skylands Capital. 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-microcap stocks.
Seeing as Boingo Wireless Inc (NASDAQ:WIFI) has faced a decline in interest from the aggregate hedge fund industry, logic holds that there was a specific group of hedgies that elected to cut their full holdings heading into Q4. At the top of the heap, Adam Wright and Gary Kohler’s Blue Clay Capital cashed in the biggest investment of the 700 funds followed by Insider Monkey, valued at close to $0.6 million in stock, and Michael M. Rothenberg’s Moab Capital Partners was right behind this move, as the fund cut about $0.4 million worth of shares.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Boingo Wireless Inc (NASDAQ:WIFI) but similarly valued. We will take a look at Culp, Inc. (NYSE:CFI), Del Frisco’s Restaurant Group Inc (NASDAQ:DFRG), Sinovac Biotech Ltd. (NASDAQ:SVA), and Straight Path Communications Inc (NYSEMKT:STRP). All of these stocks’ market caps match WIFI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CFI | 8 | 27763 | 0 |
| DFRG | 19 | 76414 | 0 |
| SVA | 6 | 25685 | 2 |
| STRP | 7 | 30791 | -1 |
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $40 million. That figure was $66 million in WIFI’s case. Del Frisco’s Restaurant Group Inc (NASDAQ:DFRG) is the most popular stock in this table. On the other hand Sinovac Biotech Ltd. (NASDAQ:SVA) is the least popular one with only 6 bullish hedge fund positions. Boingo Wireless Inc (NASDAQ:WIFI) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard DFRG might be a better candidate to consider taking a long position in.
Disclosure: None
