The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge funds have been producing disappointing net returns in recent years, however that was partly due to the poor performance of small-cap stocks in general. Well, small-cap stocks finally turned the corner and have been beating the large-cap stocks by more than 10 percentage points over the last 5 months.This means the relevancy of hedge funds’ public filings became inarguable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Vera Bradley, Inc. (NASDAQ:VRA).
Vera Bradley, Inc. (NASDAQ:VRA) shares didn’t see a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged and there were 16 funds tracked by Insider Monkey long the stock at the end of September. At the end of this article we will also compare VRA to other stocks including Nanometrics Incorporated (NASDAQ:NANO), PDL BioPharma Inc. (NASDAQ:PDLI), and Inteliquent (NASDAQ:IQNT) to get a better sense of its popularity.
Follow Vera Bradley Inc. (NASDAQ:VRA)
Follow Vera Bradley Inc. (NASDAQ:VRA)
We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.
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Now, let’s take a glance at the new action surrounding Vera Bradley, Inc. (NASDAQ:VRA).
What have hedge funds been doing with Vera Bradley, Inc. (NASDAQ:VRA)?
At Q3’s end, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, unchanged over the quarter. By comparison, 12 hedge funds held shares or bullish call options in VRA heading into this year. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Daruma Asset Management, led by Mariko Gordon, holds the biggest position in Vera Bradley, Inc. (NASDAQ:VRA). Daruma Asset Management has a $49.7 million position in the stock, comprising 3% of its 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, one of the largest hedge funds in the world, with a $21.5 million position; less than 0.1% of its 13F portfolio is allocated to the company. Remaining peers that hold long positions comprise Chuck Royce’s Royce & Associates, Joel Ramin’s 12 West Capital Management and D E Shaw. 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.
We already know that not all hedge funds are bullish on the stock and some hedge funds actually got rid of their positions entirely. At the top of the heap, Matthew Hulsizer’s PEAK6 Capital Management got rid of the largest position of the 700 funds monitored by Insider Monkey, comprising an estimated $0.5 million in call options. Ken Griffin’s fund, Citadel Investment Group, also dumped its call options, about $0.3 million worth.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Vera Bradley, Inc. (NASDAQ:VRA) but similarly valued. We will take a look at Nanometrics Incorporated (NASDAQ:NANO), PDL BioPharma Inc. (NASDAQ:PDLI), Inteliquent (NASDAQ:IQNT), and Star Gas Partners, L.P. (NYSE:SGU). All of these stocks’ market caps are closest to VRA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NANO | 15 | 75248 | -1 |
| PDLI | 20 | 81412 | 6 |
| IQNT | 13 | 82690 | 2 |
| SGU | 5 | 49369 | 1 |
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $72 million. That figure was $112 million in VRA’s case. PDL BioPharma Inc. (NASDAQ:PDLI) is the most popular stock in this table. On the other hand Star Gas Partners, L.P. (NYSE:SGU) is the least popular one with only five bullish hedge fund positions. Vera Bradley, Inc. (NASDAQ:VRA) 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 PDL BioPharma might be a better candidate to consider taking a long position in.
Disclosure: none
