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 some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. 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 vast 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.
Jernigan Capital Inc (NYSE:JCAP) was in 5 hedge funds’ portfolios at the end of the third quarter of 2015. JCAP investors should pay attention to an increase in hedge fund sentiment recently. There were 4 hedge funds in our database with JCAP holdings at the end of the previous quarter. At the end of this article we will also compare JCAP to other stocks including GTx, Inc. (NASDAQ:GTXI), Arowana Inc. Ordinary Shares (NASDAQ:ARWA), and Rick’s Cabaret Int’l, Inc (NASDAQ:RICK) to get a better sense of its popularity.
Follow Jernigan Capital Inc. (NYSE:JCAP)
Follow Jernigan Capital Inc. (NYSE:JCAP)
Keeping this in mind, let’s take a look at the key action regarding Jernigan Capital Inc (NYSE:JCAP).
How are hedge funds trading Jernigan Capital Inc (NYSE:JCAP)?
Heading into Q4, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 25% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Anand Parekh’s Alyeska Investment Group has the most valuable position in Jernigan Capital Inc (NYSE:JCAP), worth close to $4.5 million, corresponding to 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is J. Carlo Cannell of Cannell Capital, with a $1 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Remaining members of the smart money that are bullish include Mark T. Gallogly’s Centerbridge Partners, Emanuel J. Friedman’s EJF Capital and Chuck Royce’s Royce & Associates.
Now, key money managers were leading the bulls’ herd. Cannell Capital, managed by J. Carlo Cannell, initiated the biggest position in Jernigan Capital Inc (NYSE:JCAP). Cannell Capital had $1 million invested in the company at the end of the quarter. Mark T. Gallogly’s Centerbridge Partners also made a $0.9 million investment in the stock during the quarter. The only other fund with a brand new JCAP position is Emanuel J. Friedman’s EJF Capital.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Jernigan Capital Inc (NYSE:JCAP) but similarly valued. These stocks are GTx, Inc. (NASDAQ:GTXI), Arowana Inc. Ordinary Shares (NASDAQ:ARWA), Rick’s Cabaret Int’l, Inc (NASDAQ:RICK), and Atlantic Alliance Partnership Corp (NASDAQ:AAPC). All of these stocks’ market caps match JCAP’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GTXI | 4 | 8329 | 0 |
| ARWA | 6 | 19506 | 0 |
| RICK | 11 | 7287 | 3 |
| AAPC | 7 | 19043 | -1 |
As you can see these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $14 million. That figure was $7 million in JCAP’s case. Rick’s Cabaret Int’l, Inc (NASDAQ:RICK) is the most popular stock in this table. On the other hand GTx, Inc. (NASDAQ:GTXI) is the least popular one with only 4 bullish hedge fund positions. Jernigan Capital Inc (NYSE:JCAP) 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 RICK might be a better candidate to consider a long position.