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.
One stock that saw an increase in popularity among smart money in our database during the third quarter is CRA International, Inc. (NASDAQ:CRAI). At the end of September, 14 funds held shares of the company. 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 Zix Corporation (NASDAQ:ZIXI), Invivo Therapeutics Holdings Corp (NASDAQ:NVIV), and Diana Shipping Inc. (NYSE:DSX) to gather more data points.
Follow Cra International Inc. (NASDAQ:CRAI)
Follow Cra International Inc. (NASDAQ:CRAI)
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 review the fresh action encompassing CRA International, Inc. (NASDAQ:CRAI).
How are hedge funds trading CRA International, Inc. (NASDAQ:CRAI)?
At the end of the third quarter, 14 funds tracked by Insider Monkey were bullish on this stock, up by 17% from the end of the second quarter. Below, you can check out the change in hedge fund sentiment towards CRAI over the last five quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, John H Lewis’ Osmium Partners has the largest position in CRA International, Inc. (NASDAQ:CRAI), worth close to $8.8 million, corresponding to 7.3% of its total 13F portfolio. On Osmium Partners’s heels is Renaissance Technologies, one of the largest hedge funds in the world, which holds a $6.7 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining peers that are bullish include John W. Rogers’ Ariel Investments, Paul Hondros’ AlphaOne Capital Partners, and Cliff Asness’ AQR Capital Management. 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.
Consequently, some big names have jumped into CRA International, Inc. (NASDAQ:CRAI) headfirst. Algert Coldiron Investors, led by Peter Algert and Kevin Coldiron, created the most valuable position in CRA International, Inc. (NASDAQ:CRAI). Algert Coldiron Investors had $1 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $0.4 million investment in the stock during the quarter. The only other fund with a new position in the stock is Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
Let’s also examine hedge fund activity in other stocks similar to CRA International, Inc. (NASDAQ:CRAI). These stocks are Zix Corporation (NASDAQ:ZIXI), Invivo Therapeutics Holdings Corp (NASDAQ:NVIV), Diana Shipping Inc. (NYSE:DSX), and USA Technologies, Inc. (NASDAQ:USAT). This group of stocks’ market values match CRAI’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ZIXI | 14 | 26814 | 1 |
| NVIV | 4 | 3149 | -1 |
| DSX | 7 | 27523 | 0 |
| USAT | 8 | 5585 | 2 |
As you can see these stocks had an average of eight hedge funds with bullish positions and the average amount invested in these stocks was $16 million. That figure was $37 million in CRAI’s case. Zix Corporation (NASDAQ:ZIXI) is the most popular stock in this table. On the other hand Invivo Therapeutics Holdings Corp (NASDAQ:NVIV) is the least popular one with only four bullish hedge fund positions. CRA International, Inc. (NASDAQ:CRAI) had the same number of funds holding its shares as Zix Corporation, which suggests that it may be a good idea to study it in more detail and potentially including it in your portfolio.
Disclosure: none
