We can judge whether FIRSTSERVICE CORPORATION (NASDAQ:FSV) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, research shows that these picks historically outperformed the market when we factor in known risk factors.
FIRSTSERVICE CORPORATION (NASDAQ:FSV) investors should pay attention to an increase in activity from the world’s largest hedge funds in recent months. 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 Axiall Corp (NYSE:AXLL), Benchmark Electronics, Inc. (NYSE:BHE), and Emergent Biosolutions Inc (NYSE:EBS) to gather more data points.
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To most shareholders, hedge funds are assumed to be underperforming, outdated financial vehicles of yesteryear. While there are over 8000 funds in operation at present, we look at the aristocrats of this club, around 700 funds. Most estimates calculate that this group of people watch over the lion’s share of the hedge fund industry’s total capital, and by paying attention to their inimitable stock picks, Insider Monkey has unsheathed many investment strategies that have historically outperformed the broader indices. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points a year for a decade in their back tests.
Keeping this in mind, let’s take a gander at the recent action surrounding FirstService Corp (NASDAQ:FSV).
Hedge fund activity in FirstService Corp (NASDAQ:FSV)
At the end of the third quarter, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 67% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Weatherbie Capital, managed by Matthew A. Weatherbie, holds the biggest position in FirstService Corp (NASDAQ:FSV). Weatherbie Capital has a $26 million position in the stock, comprising 3% of its 13F portfolio. On Weatherbie Capital’s heels is Lionstone Capital Management, managed by Leon Lowenstein, which holds a $23.5 million position; 12.3% of its 13F portfolio is allocated to the stock. Other members of the smart money that hold long positions encompass Renaissance Technologies, Robert B. Gillam’s McKinley Capital Management, and Michael Kaufman’s MAK Capital One.
Now, specific money managers were leading the bulls’ herd. MAK Capital One made a $2,000 investment in the stock during the quarter.
Let’s go over hedge fund activity in other stocks similar to FirstService Corp (NASDAQ:FSV). We will take a look at Axiall Corp (NYSE:AXLL), Benchmark Electronics, Inc. (NYSE:BHE), Emergent Biosolutions Inc (NYSE:EBS), and Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX). All of these stocks’ market caps are similar to FIRSTSERVICE CORPORATION (NASDAQ:FSV)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AXLL | 30 | 270091 | 0 |
| BHE | 20 | 207574 | 4 |
| EBS | 17 | 154819 | 1 |
| LXRX | 17 | 48280 | 1 |
As you can see, these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $170 million. That figure was $64 million in FIRSTSERVICE CORPORATION (NASDAQ:FSV)’s case. Axiall Corp (NYSE:AXLL) is the most popular stock in this table. On the other hand, Emergent Biosolutions Inc (NYSE:EBS) is the least popular one with only 17 bullish hedge fund positions. Compared to these stocks, FirstService Corp (NASDAQ:FSV) is even less popular than Emergent Biosolutions Inc (NYSE:EBS). Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed 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.