Joy Global Inc. (JOY): Are Hedge Funds Right About This Stock?

You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.

Joy Global Inc. (NYSE:JOY) was in 28 hedge funds’ portfolios at the end of September. JOY investors should be aware of an increase in enthusiasm from smart money lately. There were 19 hedge funds in our database with JOY holdings at the end of the previous quarter. At the end of this article we will also compare JOY to other stocks including Loral Space & Communications Ltd. (NASDAQ:LORL), Abercrombie & Fitch Co. (NYSE:ANF), and Tetra Tech, Inc. (NASDAQ:TTEK) to get a better sense of its popularity.

With all of this in mind, we’re going to take a peek at the new action encompassing Joy Global Inc. (NYSE:JOY).

What have hedge funds been doing with Joy Global Inc. (NYSE:JOY)?

At Q3’s end, a total of 28 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 47% from the second quarter. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC has the largest position in Joy Global Inc. (NYSE:JOY), worth close to $58.8 million, corresponding to 0.5% of its total 13F portfolio. Sitting at the No. 2 spot is Citadel Investment Group, led by Ken Griffin, holding an $30 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Remaining peers that are bullish contain D E Shaw, John Overdeck and David Siegel’s Two Sigma Advisors and Jim Simons’ Renaissance Technologies.

Consequently, specific money managers were breaking ground themselves. Renaissance Technologies, managed by Jim Simons, created the most valuable position in Joy Global Inc. (NYSE:JOY). Renaissance Technologies had $21.2 million invested in the company at the end of the quarter. Jeffrey Bersh and Michael Wartell’s Venor Capital Management also made an $16.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Joel Greenblatt’s Gotham Asset Management, and Dmitry Balyasny’s Balyasny Asset Management.

Let’s also examine hedge fund activity in other stocks similar to Joy Global Inc. (NYSE:JOY). These stocks are Loral Space & Communications Ltd. (NASDAQ:LORL), Abercrombie & Fitch Co. (NYSE:ANF), Tetra Tech, Inc. (NASDAQ:TTEK), and Hatteras Financial Corp. (NYSE:HTS). This group of stocks’ market valuations are closest to JOY’s market valuation.

As you can see these stocks had an average of 18.75 hedge funds with bullish positions and the average amount invested in these stocks was $304 million. That figure was $254 million in JOY’s case. Loral Space & Communications Ltd. (NASDAQ:LORL) is the most popular stock in this table. On the other hand Hatteras Financial Corp. (NYSE:HTS) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Joy Global Inc. (NYSE:JOY) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.