You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.
Is South Jersey Industries Inc (NYSE:SJI) ready to rally soon? The smart money is in an optimistic mood. The number of long hedge fund positions that are disclosed in regulatory 13F filings swelled by 3 lately. There were 8 hedge funds in our database with SJI holdings at the end of September. At the end of this article we will also compare SJI to other stocks including Nektar Therapeutics (NASDAQ:NKTR), Insulet Corporation (NASDAQ:PODD), and HB Fuller Co (NYSE:FUL) to get a better sense of its popularity.
Follow South Jersey Industries Inc (NYSE:SJI)
Follow South Jersey Industries Inc (NYSE:SJI)
We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.
vovan/Shutterstock.com
Keeping this in mind, we’re going to check out the latest action encompassing South Jersey Industries Inc (NYSE:SJI).
How have hedgies been trading South Jersey Industries Inc (NYSE:SJI)?
At Q3’s end, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a change of 60% from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards SJI over the last 5 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, one of the largest hedge funds in the world, holds the largest position in South Jersey Industries Inc (NYSE:SJI). Renaissance Technologies has a $9.8 million position in the stock, comprising less than 0.1% of its 13F portfolio. Remaining professional money managers with similar optimism include Ken Griffin’s Citadel Investment Group, and Paul Tudor Jones’s Tudor Investment Corp. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
As one would reasonably expect, some big names have been driving this bullishness. Stevens Capital Management, led by Matthew Tewksbury, created the most valuable position in South Jersey Industries Inc (NYSE:SJI). Stevens Capital Management had $0.7 million invested in the company at the end of the quarter. Clinton Group also made a $0.4 million investment in the stock during the quarter. The other funds with brand new SJI positions are Cliff Asness’ AQR Capital Management and Robert B. Gillam’s McKinley Capital Management.
Let’s check out hedge fund activity in other stocks similar to South Jersey Industries Inc (NYSE:SJI). We will take a look at Nektar Therapeutics (NASDAQ:NKTR), Insulet Corporation (NASDAQ:PODD), HB Fuller Co (NYSE:FUL), and Grifols SA, Barcelona (NASDAQ:GRFS). This group of stocks’ market values are closest to SJI’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NKTR | 17 | 222312 | 0 |
| PODD | 20 | 366551 | 0 |
| FUL | 15 | 110464 | -8 |
| GRFS | 12 | 130512 | 1 |
As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $207 million. That figure was $13 million in SJI’s case. Insulet Corporation (NASDAQ:PODD) is the most popular stock in this table. On the other hand Grifols SA, Barcelona (NASDAQ:GRFS) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks South Jersey Industries Inc (NYSE:SJI) is even less popular than GRFS. 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.
Disclosure: None
