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.
NV5 Holdings Inc (NASDAQ:NVEE) has experienced a lack in growth in its support from the world’s most elite money managers of late, being held in 6 of their portfolios at the end of September. 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 Ampio Pharmaceuticals, Inc. (NASDAQ:AMPE), Agile Therapeutics Inc (NASDAQ:AGRX), and Century Casinos, Inc. (NASDAQ:CNTY) to gather more data points.
Follow Nv5 Global Inc. (NASDAQ:NVEE)
Follow Nv5 Global Inc. (NASDAQ:NVEE)
To most traders, hedge funds are viewed as slow, old financial vehicles of years past. While there are greater than 8,000 funds with their doors open today, our experts choose to focus on the crème de la crème of this group, around 700 funds. These hedge fund managers direct the lion’s share of the hedge fund industry’s total asset base, and by keeping an eye on their finest equity investments, Insider Monkey has come up with several investment strategies that have historically exceeded Mr. Market. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points per year for a decade in their back tests.
Keeping this in mind, we’re going to take a peek at the recent action encompassing NV5 Holdings Inc (NASDAQ:NVEE).
What does the smart money think about NV5 Holdings Inc (NASDAQ:NVEE)?
Heading into Q4, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, flat over the last quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Manatuck Hill Partners, managed by Mark Broach, holds the largest position in NV5 Holdings Inc (NASDAQ:NVEE). Manatuck Hill Partners has a $4.8 million position in the stock, comprising 2.1% of its 13F portfolio. Coming in second is Royce & Associates, a mutual fund managed by Chuck Royce, which holds a $4.5 million position; less than 0.1% of its 13F portfolio is allocated to the stock. Some other professional money managers that are bullish encompass Renaissance Technologies, Mark N. Diker’s Diker Management, and Cliff Asness’ AQR Capital Management.
Earlier, we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions either. This indicates that hedge funds, at the very best, perceive this stock as dead money and haven’t identified any viable catalysts to attract their attention.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as NV5 Holdings Inc (NASDAQ:NVEE) but similarly valued. We will take a look at Ampio Pharmaceuticals, Inc. (NASDAQ:AMPE), Agile Therapeutics Inc (NASDAQ:AGRX), Century Casinos, Inc. (NASDAQ:CNTY), and J Alexander’s Holdings Inc (NYSE:JAX). All of these stocks’ market caps match NV5 Holdings Inc (NASDAQ:NVEE)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AMPE | 5 | 11275 | -4 |
| AGRX | 9 | 41890 | -1 |
| CNTY | 8 | 33083 | 1 |
| JAX | 18 | 31596 | 18 |
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $29 million. That figure was $12 million in NV5 Holdings Inc (NASDAQ:NVEE)’s case. J Alexander’s Holdings Inc (NYSE:JAX) is the most popular stock in this table. On the other hand, Ampio Pharmaceuticals, Inc. (NASDAQ:AMPE) is the least popular one with only 5 bullish hedge fund positions. NV5 Holdings Inc (NASDAQ:NVEE) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, J Alexander’s Holdings Inc (NYSE:JAX) might be a better candidate to consider a long position in.
