Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips on the charts, usually don’t make them change their opinion towards a company. This time it may be different. During the third quarter we observed increased volatility and small-cap stocks underperformed the market. Hedge fund investor letters indicated that they are cutting their overall exposure, closing out some position and doubling down on others. Let’s take a look at the hedge fund sentiment towards Hill International Inc (NYSE:HIL) to find out whether it was one of their high conviction long-term ideas.
Hill International Inc (NYSE:HIL) hasn’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 10 hedge funds’ portfolios at the end of the third quarter of 2015. At the end of this article we will also compare HIL to other stocks, including Allied Motion Technologies, Inc. (NASDAQ:AMOT), Enphase Energy Inc (NASDAQ:ENPH), and Bill Barrett Corporation (NYSE:BBG) to get a better sense of its popularity.
Follow Hill International Inc. (NYSE:HIL)
Follow Hill International Inc. (NYSE:HIL)
If you’d ask most stock holders, hedge funds are perceived as worthless, old financial vehicles of years past. While there are more than 8000 funds in operation today, Our researchers look at the moguls of this group, around 700 funds. It is estimated that this group of investors has their hands on most of the smart money’s total asset base, and by tailing their top investments, Insider Monkey has unsheathed various investment strategies that have historically outperformed the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy outpaced the S&P 500 index by 12 percentage points a year for a decade in their back tests.
Keeping this in mind, we’re going to take a glance at the recent action regarding Hill International Inc (NYSE:HIL).
How have hedgies been trading Hill International Inc (NYSE:HIL)?
Heading into Q4, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, flat over the quarter. With hedge funds’ capital changing hands, there exist a few key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Peter Schliemann’s Rutabaga Capital Management has the most valuable position in Hill International Inc (NYSE:HIL), worth close to $9.7 million, amounting to 1.2% of its total 13F portfolio. Coming in second is Skylands Capital, managed by Charles Paquelet, which holds a $3 million position; 0.4% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions comprise Jim Simons’s Renaissance Technologies, Peter Algert and Kevin Coldiron’s Algert Coldiron Investors and Matthew Hulsizer’s PEAK6 Capital Management.
Moreover, a few hedge funds that decided to sell off their entire stakes by the end of the third quarter. At the top of the heap, Phillip Goldstein, Andrew Dakos and Steven Samuels’s Bulldog Investors dumped the largest investment of the 700 funds monitored by Insider Monkey, totaling about $15.6 million in stock, and Ken Gray and Steve Walsh’s Bryn Mawr Capital was right behind this move, as the fund dumped about $0.3 million worth of stock. These bearish behaviors are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks similar to Hill International Inc (NYSE:HIL). These stocks are Allied Motion Technologies, Inc. (NASDAQ:AMOT), Enphase Energy Inc (NASDAQ:ENPH), Bill Barrett Corporation (NYSE:BBG), and Care.com Inc (NYSE:CRCM). This group of stocks’ market values are closest to HIL’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AMOT | 7 | 5108 | -1 |
| ENPH | 10 | 37238 | -4 |
| BBG | 16 | 15779 | 1 |
| CRCM | 8 | 23432 | -2 |
As you can see these stocks had an average of 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $20 million. That figure was $16 million in HIL’s case. Bill Barrett Corporation (NYSE:BBG) is the most popular stock in this table, while Allied Motion Technologies, Inc. (NASDAQ:AMOT) is the least popular one with only 7 bullish hedge fund positions. Hill International Inc (NYSE:HIL) 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 BBG might be a better candidate to consider for a more detailed analysis.
