It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. The Standard and Poor’s 500 Index returned 7.6% over the 12-month period ending November 21, while more than 51% of the constituents of the index underperformed the benchmark. Hence, a random stock picking process will most likely lead to disappointment. At the same time, the 30 most favored mid-cap stocks by the best performing hedge funds monitored by Insider Monkey generated a return of 18% over the same time span. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in Spartan Motors Inc (NASDAQ:SPAR).
At the end of September, 14 funds from our database held shares of Spartan Motors Inc (NASDAQ:SPAR) and it saw an increase in support from smart money investors last quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Jive Software Inc (NASDAQ:JIVE), Dorian LPG Ltd (NYSE:LPG), and UMH Properties, Inc (NYSE:UMH) to gather more data points.
Follow Shyft Group Inc. (NASDAQ:SHYF)
Follow Shyft Group Inc. (NASDAQ:SHYF)
IM_photo/Shutterstock.com
Now, let’s view the fresh action regarding Spartan Motors Inc (NASDAQ:SPAR).
What does the smart money think about Spartan Motors Inc (NASDAQ:SPAR)?
A total of 14 funds tracked by Insider Monkey held long positions in Spartan Motors at the end of the third quarter, up by one fund from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards SPAR over the last five quarters. So, let’s find out 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, John W. Rogers’ Ariel Investments has the number one position in Spartan Motors Inc (NASDAQ:SPAR), worth close to $17.1 million, corresponding to 0.2% of its total 13F portfolio. On Ariel Investments’s heels is Royce & Associates, led by Chuck Royce, holding a $16.7 million position; 0.1% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors with similar optimism comprise Renaissance Technologies, one of the largest hedge funds in the world, and Mario Gabelli’s GAMCO Investors. 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.
With a general bullishness amongst the heavyweights, key money managers have been driving this bullishness. G2 Investment Partners Management, led by Josh Goldberg, created the biggest position in Spartan Motors Inc (NASDAQ:SPAR). G2 Investment Partners Management had $1.9 million invested in the company at the end of the quarter. Warren Lammert’s Granite Point Capital also made a $0.6 million investment in the stock during the quarter. The only other fund with a new position in the stock is Cliff Asness’ AQR Capital Management.
Let’s check out hedge fund activity in other stocks similar to Spartan Motors Inc (NASDAQ:SPAR). These stocks are Jive Software Inc (NASDAQ:JIVE), Dorian LPG Ltd (NYSE:LPG), UMH Properties, Inc (NYSE:UMH), and BioScrip Inc. (NASDAQ:BIOS). This group of stocks’ market valuations are similar to SPAR’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| JIVE | 13 | 48850 | -2 |
| LPG | 8 | 56727 | -2 |
| UMH | 5 | 28818 | 1 |
| BIOS | 20 | 153706 | -3 |
As you can see these stocks had an average of 12 funds with bullish positions and the average amount invested in these stocks was $72 million, versus $50 million in SPAR’s case. BioScrip Inc. (NASDAQ:BIOS) is the most popular stock in this table, while UMH Properties, Inc (NYSE:UMH) is the least popular one with only five bullish hedge fund positions. Spartan Motors Inc (NASDAQ:SPAR) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard BioScrip Inc. (NASDAQ:BIOS) might be a better candidate to consider taking a long position in.
Disclosure: none
