Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
Is Vishay Precision Group Inc (NYSE:VPG) worth your attention right now? Hedge funds are in a bearish mood. The number of bullish hedge fund bets decreased by 1 recently. Our calculations also showed that vpg isn’t among the 30 most popular stocks among hedge funds. VPG was in 15 hedge funds’ portfolios at the end of the third quarter of 2018. There were 16 hedge funds in our database with VPG holdings at the end of the previous quarter.
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 market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
Let’s check out the latest hedge fund action surrounding Vishay Precision Group Inc (NYSE:VPG).
How are hedge funds trading Vishay Precision Group Inc (NYSE:VPG)?
At the end of the third quarter, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -6% from the previous quarter. The graph below displays the number of hedge funds with bullish position in VPG over the last 13 quarters. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
More specifically, Nokomis Capital was the largest shareholder of Vishay Precision Group Inc (NYSE:VPG), with a stake worth $72.7 million reported as of the end of September. Trailing Nokomis Capital was Renaissance Technologies, which amassed a stake valued at $27.1 million. D E Shaw, Harvey Partners, and Royce & Associates were also very fond of the stock, giving the stock large weights in their portfolios.
Due to the fact that Vishay Precision Group Inc (NYSE:VPG) has experienced a decline in interest from the entirety of the hedge funds we track, logic holds that there was a specific group of hedgies who were dropping their full holdings by the end of the third quarter. At the top of the heap, Peter Muller’s PDT Partners said goodbye to the largest investment of the “upper crust” of funds tracked by Insider Monkey, valued at an estimated $0.4 million in call options, and Matthew Hulsizer’s PEAK6 Capital Management was right behind this move, as the fund dropped about $0.2 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 1 funds by the end of the third quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Vishay Precision Group Inc (NYSE:VPG) but similarly valued. We will take a look at Waterstone Financial, Inc. (NASDAQ:WSBF), Pure Acquisition Corp. (NASDAQ:PACQ), Zymeworks Inc. (NYSE:ZYME), and Blackrock Muni Intermediate Drtn Fnd Inc (NYSE:MUI). This group of stocks’ market caps resemble VPG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WSBF | 9 | 83269 | -2 |
| PACQ | 19 | 109440 | 0 |
| ZYME | 13 | 95045 | 1 |
| MUI | 3 | 2322 | -2 |
| Average | 11 | 72519 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $73 million. That figure was $135 million in VPG’s case. Pure Acquisition Corp. (NASDAQ:PACQ) is the most popular stock in this table. On the other hand Blackrock Muni Intermediate Drtn Fnd Inc (NYSE:MUI) is the least popular one with only 3 bullish hedge fund positions. Vishay Precision Group Inc (NYSE:VPG) 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 PACQ might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
