It was a rough third quarter for many hedge funds, which were naturally unable to overcome the big dip in the broad market, as the S&P 500 fell by about 7% during the quarter. The Russell 2000, composed of smaller companies, performed even worse, trailing the S&P by about 14 percentage points between June 25 and October 30, as investors fled less-known quantities for safe havens. This was the case with hedge funds, who we heard were pulling money from the market amid the volatility, which included money from small-cap stocks, which they invest in at a higher rate than other investors. This action contributed to the greater decline in these stocks during the tumultuous period. We will study how this market volatility affected their sentiment towards Ivy High Income Opportunities Fund (NYSE:IVH) during the quarter below.
Is Ivy High Income Opportunities Fund (NYSE:IVH) a buy here? The best stock pickers are taking a bullish view. The number of long hedge fund positions inched up by 1 in recent months. IVH was in 4 hedge funds’ portfolios at the end of September. There were 3 hedge funds in our database with IVH holdings at the end of the previous 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 vTv Therapeutics Inc (NASDAQ:VTVT), CAI International Inc (NYSE:CAI), and New Home Company Inc (NYSE:NWHM) to gather more data points.
Follow Delaware Ivy High Income Opportunities Fund (NYSE:IVH)
Follow Delaware Ivy High Income Opportunities Fund (NYSE:IVH)
If you’d ask most investors, hedge funds are viewed as underperforming, outdated financial vehicles of years past. While there are more than an 8000 funds trading at the moment, We look at the leaders of this group, approximately 700 funds. These money managers preside over most of the smart money’s total asset base, and by following their matchless stock picks, Insider Monkey has discovered a few investment strategies that have historically outpaced the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 12 percentage points per annum for a decade in their back tests.
Keeping this in mind, let’s take a peek at the fresh action regarding Ivy High Income Opportunities Fund (NYSE:IVH).
What have hedge funds been doing with Ivy High Income Opportunities Fund (NYSE:IVH)?
Heading into Q4, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 33% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Mariner Investment Group, managed by William Michaelcheck, holds the number one position in Ivy High Income Opportunities Fund (NYSE:IVH). Mariner Investment Group has a $1.5 million position in the stock, comprising 0.3% of its 13F portfolio. Sitting at the No. 2 spot is Clint Carlson of Carlson Capital, with a $1.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that are bullish encompass Boaz Weinstein’s Saba Capital and Benjamin A. Smith’s Laurion Capital Management.
As aggregate interest increased, key money managers have jumped into Ivy High Income Opportunities Fund (NYSE:IVH) headfirst. Laurion Capital Management assembled the most valuable position in Ivy High Income Opportunities Fund (NYSE:IVH). Laurion Capital Management had $0.8 million invested in the company at the end of the quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Ivy High Income Opportunities Fund (NYSE:IVH). We will take a look at vTv Therapeutics Inc (NASDAQ:VTVT), CAI International Inc (NYSE:CAI), New Home Company Inc (NYSE:NWHM), and Trupanion Inc (NYSE:TRUP). This group of stocks’ market values are closest to IVH’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VTVT | 6 | 4557 | 6 |
| CAI | 11 | 6525 | 11 |
| NWHM | 4 | 44222 | -1 |
| TRUP | 5 | 16570 | -3 |
As you can see these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $18 million, compared to just $5 million in IVH’s case. CAI International Inc (NYSE:CAI) is the most popular stock in this table. New Home Company Inc (NYSE:NWHM) is the least popular one with only 4 bullish hedge fund positions, the same as Ivy High Income Opportunities Fund (NYSE:IVH). Considering that hedge funds aren’t fond of this stock in relation to other companies covered 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.