Reputable billionaire investors such as Nelson Peltz and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won’t accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on small companies, which makes it hard for an individual investor to pin down a ‘winner’ within the small-cap collection of stocks. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and unlimited resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.
Grupo Financero Sntdr Mxco SAB de CV ADR (NYSE:BSMX) investors should pay attention to an increase in support from the world’s most elite money managers lately. BSMX was in 10 hedge funds’ portfolios at the end of the third quarter of 2015. There were 9 hedge funds in our database with BSMX positions at the end of the previous quarter. At the end of this article we will also compare BSMX to other stocks, including Bunge Ltd (NYSE:BG), American Water Works Co., Inc. (NYSE:AWK), and Lennar Corporation (NYSE:LEN) to get a better sense of its popularity.
To most investors, hedge funds are assumed to be unimportant, outdated financial vehicles of years past. While there are over 8000 funds with their doors open today, our researchers hone in on the crème de la crème of this group, about 700 funds. Most estimates calculate that this group of people administer bulk of the hedge fund industry’s total asset base, and by shadowing their matchless stock picks, Insider Monkey has uncovered several investment strategies that have historically surpassed the market. Insider Monkey’s small-cap hedge fund strategy outpaced the S&P 500 index by 12 percentage points annually for a decade in their back tests.
Now, we’re going to take a look at the key action regarding Grupo Financero Sntdr Mxco SAB de CV ADR (NYSE:BSMX).
Hedge fund activity in Grupo Financero Sntdr Mxco SAB de CV ADR (NYSE:BSMX)
At Q3’s end, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 11% from the previous quarter. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Indus Capital, managed by David Kowitz and Sheldon Kasowitz, holds the most valuable position in Grupo Financero Sntdr Mxco SAB de CV ADR (NYSE:BSMX). Indus Capital has a $10.6 million position in the stock, comprising 1.4% of its 13F portfolio. Coming in second is Renaissance Technologies, managed by Jim Simons, which holds a $2.1 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors that hold long positions encompass David Halpert’s Prince Street Capital Management, Israel Englander’s Millennium Management and Andre F. Perold’s HighVista Strategies.
As aggregate interest increased, key hedge funds were leading the bulls’ herd. Prince Street Capital Management, managed by David Halpert, created the most outsized position in Grupo Financero Sntdr Mxco SAB de CV ADR (NYSE:BSMX). Prince Street Capital Management had $1.7 million invested in the company at the end of the quarter. HighVista Strategies also made a $0.2 million investment in the stock during the quarter. The only other fund with a brand new BSMX position is Mike Vranos’s Ellington.
Let’s also examine hedge fund activity in other stocks similar to Grupo Financero Sntdr Mxco SAB de CV ADR (NYSE:BSMX). We will take a look at Bunge Ltd (NYSE:BG), American Water Works Co., Inc. (NYSE:AWK), Lennar Corporation (NYSE:LEN), and Juniper Networks, Inc. (NYSE:JNPR). All of these stocks’ market caps match BSMX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BG | 28 | 1069577 | -5 |
| AWK | 22 | 291523 | -5 |
| LEN | 49 | 1106175 | 5 |
| JNPR | 41 | 928212 | -4 |
As you can see these stocks had an average of 35 hedge funds with bullish positions and the average amount invested in these stocks was $849 million. That figure was just $22 million in BSMX’s case. Lennar Corporation (NYSE:LEN) is the most popular stock in this table. On the other hand American Water Works Co., Inc. (NYSE:AWK) is the least popular one with only 22 bullish hedge fund positions. Compared to these stocks Grupo Financero Sntdr Mxco SAB de CV ADR (NYSE:BSMX) is even less popular than AWK. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
