Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
One stock that has seen an increase in hedge fund interest in recent months is FireEye Inc (NASDAQ:FEYE). However, 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 J.C. Penney Company, Inc. (NYSE:JCP), Beacon Roofing Supply, Inc. (NASDAQ:BECN), and MFA Financial, Inc. (NYSE:MFA) to gather more data points.
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Keeping this in mind, let’s view the fresh action regarding FireEye Inc (NASDAQ:FEYE).
What have hedge funds been doing with FireEye Inc (NASDAQ:FEYE)?
At the end of the third quarter, a total of 29 of the hedge funds tracked by Insider Monkey held long positions in this stock, which represents a gain of 7% from the second quarter of 2016. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Ken Griffin’s Citadel Investment Group has the biggest position in FireEye Inc (NASDAQ:FEYE), worth close to $79 million. The second most bullish fund manager is Alyeska Investment Group, managed by Anand Parekh, which holds a $46.3 million position.
Consequently, key hedge funds have been driving this bullishness. Alyeska Investment Group initiated the largest position in FireEye Inc (NASDAQ:FEYE). Josh Resnick’s Jericho Capital Asset Management, also initiated a $21.8 million position during the quarter. The other funds with new positions in the stock are Israel Englander’s Millennium Management, Mike Masters’ Masters Capital Management, and Philippe Jabre’s Jabre Capital Partners.
Let’s now review hedge fund activity in other stocks similar to FireEye Inc (NASDAQ:FEYE). We will take a look at J.C. Penney Company, Inc. (NYSE:JCP), Beacon Roofing Supply, Inc. (NASDAQ:BECN), MFA Financial, Inc. (NYSE:MFA), and Primerica, Inc. (NYSE:PRI). All of these stocks’ market caps are similar to FEYE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| JCP | 32 | 459927 | 4 |
| BECN | 33 | 429386 | -7 |
| MFA | 11 | 54202 | -1 |
| PRI | 17 | 256653 | 5 |
As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $300 million. That figure was $284 million in FEYE’s case. Beacon Roofing Supply, Inc. (NASDAQ:BECN) is the most popular stock in this table. On the other hand MFA Financial, Inc. (NYSE:MFA) is the least popular one with only 11 bullish hedge fund positions. FireEye Inc (NASDAQ:FEYE) 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 Beacon Roofing Supply, Inc. (NASDAQ:BECN) might be a better candidate to consider a long position.
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