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.
In this article, we are going to take a closer look at the smart money sentiment towards Zebra Technologies Corp. (NASDAQ:ZBRA). Overall, it looks like investors from our database are taking a pessimistic view, since the number of funds long the stock declined by two to 17 during the third quarter. At the end of this article we will also compare ZBRA to other stocks including Buffalo Wild Wings (NASDAQ:BWLD), Science Applications International Corp (NYSE:SAIC), and United Bankshares, Inc. (NASDAQ:UBSI) to get a better sense of its popularity.
Follow Zebra Technologies Corp (NASDAQ:ZBRA)
Follow Zebra Technologies Corp (NASDAQ:ZBRA)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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With all of this in mind, let’s review the latest action surrounding Zebra Technologies Corp. (NASDAQ:ZBRA).
What does the smart money think about Zebra Technologies Corp. (NASDAQ:ZBRA)?
At the end of the third quarter, 17 funds tracked by Insider Monkey were long Zebra Technologies, down by 11% from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards ZBRA over the last five quarters. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, John W. Rogers’ Ariel Investments has the most valuable position in Zebra Technologies Corp. (NASDAQ:ZBRA), worth close to $160.2 million, accounting for 1.9% of its total 13F portfolio. Coming in second is Matt Sirovich and Jeremy Mindich of Scopia Capital holding a $118.7 million position; 2.1% of its 13F portfolio is allocated to the company. Some other professional money managers that are bullish include Thomas Bancroft’s Makaira Partners, Dmitry Balyasny’s Balyasny Asset Management, and Edward Goodnow’s Goodnow Investment Group. We should note that Makaira Partners is 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.
Seeing as Zebra Technologies Corp. (NASDAQ:ZBRA) has weathered declining sentiment from the entirety of the hedge funds we track, we can see that there lies a certain “tier” of fund managers that decided to sell off their positions entirely in the third quarter. At the top of the heap, Bain Capital’s Brookside Capital sold off the biggest stake of all the hedgies followed by Insider Monkey, comprising an estimated $33.2 million in stock. Francis Cueto’s fund, Asturias Capital, also sold off its stock, about $7.5 million worth.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Zebra Technologies Corp. (NASDAQ:ZBRA) but similarly valued. We will take a look at Buffalo Wild Wings (NASDAQ:BWLD), Science Applications International Corp (NYSE:SAIC), United Bankshares, Inc. (NASDAQ:UBSI), and Sunstone Hotel Investors Inc (NYSE:SHO). This group of stocks’ market caps are similar to ZBRA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BWLD | 29 | 369089 | 4 |
| SAIC | 15 | 80466 | -1 |
| UBSI | 8 | 38600 | 2 |
| SHO | 7 | 22255 | -2 |
As you can see these stocks had an average of 15 funds with bullish positions and the average amount invested in these stocks was $128 million. That figure was $534 million in ZBRA’s case. Buffalo Wild Wings (NASDAQ:BWLD) is the most popular stock in this table. On the other hand Sunstone Hotel Investors Inc (NYSE:SHO) is the least popular one with only seven investors holding shares. Zebra Technologies Corp. (NASDAQ:ZBRA) 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 Buffalo Wild Wings (NASDAQ:BWLD) might be a better candidate to consider taking a long position in.
Disclosure: None
