Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the second quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Inter Parfums, Inc. (NASDAQ:IPAR) based on that data.
Inter Parfums, Inc. (NASDAQ:IPAR) investors should be aware of an increase in enthusiasm from smart money lately. Inter Parfums, Inc. (NASDAQ:IPAR) was in 19 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 22. Our calculations also showed that IPAR isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Ray Dalio of Bridgewater Associates
With all of this in mind let’s review the new hedge fund action surrounding Inter Parfums, Inc. (NASDAQ:IPAR).
Do Hedge Funds Think IPAR Is A Good Stock To Buy Now?
At second quarter’s end, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 111% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in IPAR over the last 24 quarters. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
More specifically, Royce & Associates was the largest shareholder of Inter Parfums, Inc. (NASDAQ:IPAR), with a stake worth $54.5 million reported as of the end of June. Trailing Royce & Associates was Horizon Asset Management, which amassed a stake valued at $13.7 million. Woodline Partners, Millennium Management, and Citadel Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Royce & Associates allocated the biggest weight to Inter Parfums, Inc. (NASDAQ:IPAR), around 0.37% of its 13F portfolio. Horizon Asset Management is also relatively very bullish on the stock, earmarking 0.28 percent of its 13F equity portfolio to IPAR.
As industrywide interest jumped, specific money managers were breaking ground themselves. Citadel Investment Group, managed by Ken Griffin, created the biggest position in Inter Parfums, Inc. (NASDAQ:IPAR). Citadel Investment Group had $4.6 million invested in the company at the end of the quarter. Ray Dalio’s Bridgewater Associates also made a $3.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Renaissance Technologies, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Noam Gottesman’s GLG Partners.
Let’s check out hedge fund activity in other stocks similar to Inter Parfums, Inc. (NASDAQ:IPAR). These stocks are Avaya Holdings Corp. (NYSE:AVYA), Harmony Gold Mining Co. (NYSE:HMY), Hub Group Inc (NASDAQ:HUBG), Prothena Corporation plc (NASDAQ:PRTA), Telos Corporation (NASDAQ:TLS), First Midwest Bancorp Inc (NASDAQ:FMBI), and First Merchants Corporation (NASDAQ:FRME). This group of stocks’ market valuations resemble IPAR’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AVYA | 37 | 435949 | 0 |
| HMY | 11 | 102386 | 3 |
| HUBG | 24 | 205728 | 5 |
| PRTA | 20 | 888175 | 3 |
| TLS | 19 | 228954 | 4 |
| FMBI | 17 | 107837 | 4 |
| FRME | 12 | 118179 | 1 |
| Average | 20 | 298173 | 2.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $298 million. That figure was $101 million in IPAR’s case. Avaya Holdings Corp. (NYSE:AVYA) is the most popular stock in this table. On the other hand Harmony Gold Mining Co. (NYSE:HMY) is the least popular one with only 11 bullish hedge fund positions. Inter Parfums, Inc. (NASDAQ:IPAR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for IPAR is 51.3. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. A small number of hedge funds were also right about betting on IPAR as the stock returned 7.1% since the end of the second quarter (through 10/22) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
