We at Insider Monkey have gone over 700 13F filings that hedge funds and prominent investors are required to file by the government. The 13F filings show the funds’ and investors’ portfolio positions as of September 30. In this article, we look at what those funds think of Fuel Systems Solutions, Inc. (NASDAQ:FSYS) based on that data.
Is Fuel Systems Solutions going to take off soon? Hedge funds are getting less optimistic. The number of long hedge fund bets shrunk by 3 in recent months. FSYS was in 5 hedge funds’ portfolios at the end of the third quarter of 2015. There were 8 hedge funds in our database with FSYS 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 Atlantic Coast Financial Corp (NASDAQ:ACFC), PharmAthene, Inc. (NYSEAMEX:PIP), and OHA Investment Corp (NASDAQ:OHAI) to gather more data points.
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Today there are several tools stock market investors employ to assess their holdings. A couple of the less utilized tools are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the best picks of the top investment managers can trounce the broader indices by a healthy margin (see the details here).
Now, let’s check out the key action encompassing Fuel Systems Solutions, Inc. (NASDAQ:FSYS).
What have hedge funds been doing with Fuel Systems Solutions, Inc. (NASDAQ:FSYS)?
Heading into Q4, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -38% from the previous quarter. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Matthew Drapkin and Steven R. Becker’s Becker Drapkin Management has the number one position in Fuel Systems Solutions, Inc. (NASDAQ:FSYS), worth close to $9.2 million, comprising 10.2% of its total 13F portfolio. Coming in second is Royce & Associates, managed by Chuck Royce, which holds a $5.5 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other peers that are bullish comprise Jim Simons’ Renaissance Technologies, Israel Englander’s Millennium Management and Ken Griffin’s Citadel Investment Group.
Since Fuel Systems Solutions, Inc. (NASDAQ:FSYS) has faced falling interest from the smart money, we can see that there is a sect of funds that slashed their entire stakes heading into Q4. It’s worth mentioning that Cliff Asness’ AQR Capital Management sold off the biggest position of the “upper crust” of funds followed by Insider Monkey, totaling an estimated $0.2 million in stock. Gavin Saitowitz and Cisco J. del Valle’s fund, Springbok Capital, also cut its stock, about $0.1 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 3 funds heading into Q4.
Let’s now review hedge fund activity in other stocks similar to Fuel Systems Solutions, Inc. (NASDAQ:FSYS). These stocks are Atlantic Coast Financial Corp (NASDAQ:ACFC), PharmAthene, Inc. (NYSEAMEX:PIP), OHA Investment Corp (NASDAQ:OHAI), and Pixelworks, Inc. (NASDAQ:PXLW). This group of stocks’ market caps match FSYS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ACFC | 4 | 8926 | -2 |
| PIP | 6 | 22519 | 1 |
| OHAI | 4 | 3823 | 0 |
| PXLW | 9 | 7322 | -4 |
As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $11 million, compared to $17 million in FSYS’s case. Pixelworks, Inc. (NASDAQ:PXLW) is the most popular stock in this table, while Atlantic Coast Financial Corp (NASDAQ:ACFC) is the least popular one with only 4 bullish hedge fund positions. Fuel Systems Solutions, Inc. (NASDAQ:FSYS) 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. In this regard PXLW might be a better candidate to consider a long position.
