We have been waiting for this for a year and finally the third quarter ended up showing a nice bump in the performance of small-cap stocks. Both the S&P 500 and Russell 2000 were up since the end of the second quarter, but small-cap stocks outperformed the large-cap stocks by double digits. This is important for hedge funds, which are big supporters of small-cap stocks, because their investors started pulling some of their capital out due to poor recent performance. It is very likely that equity hedge funds will deliver better risk adjusted returns in the second half of this year. In this article we are going to look at how this recent market trend affected the sentiment of hedge funds towards Streamline Health Solutions Inc. (NASDAQ:STRM) , and what that likely means for the prospects of the company and its stock.
Streamline Health Solutions Inc. (NASDAQ:STRM) shareholders have witnessed an increase in hedge fund sentiment recently. STRM was in 6 hedge funds’ portfolios at the end of the third quarter of 2016. There were 5 hedge funds in our database with STRM holdings at the end of the previous quarter. At the end of this article we will also compare STRM to other stocks including Dover Downs Gaming & Entertainment, Inc. (NYSE:DDE), OpGen Inc (NASDAQ:OPGN), and Neovasc Inc. (NASDAQ:NVCN) to get a better sense of its popularity.
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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What does the smart money think about Streamline Health Solutions Inc. (NASDAQ:STRM)?
At the end of the third quarter, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a gain of 20% from the second quarter of 2016. On the other hand, there were a total of 6 hedge funds with a bullish position in STRM at the beginning of this year. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Justin John Ferayorni of Tamarack Capital Management holds the most valuable position in Streamline Health Solutions Inc. (NASDAQ:STRM) which has a $2 million position in the stock. On Tamarack Capital Management’s heels is Wilmot B. Harkey and Daniel Mack of Nantahala Capital Management which holds a $1.3 million position. Remaining hedge funds and institutional investors that hold long positions encompass James E. Flynn’s Deerfield Management, James Dondero’s Highland Capital Management and Jim Simons’ Renaissance Technologies which is one of the largest hedge funds in the world. We should note that Nantahala Capital Management 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.
As industrywide interest jumped, some big names have jumped into Streamline Health Solutions Inc. (NASDAQ:STRM) headfirst. Nantahala Capital Management initiated the most valuable position in Streamline Health Solutions Inc. (NASDAQ:STRM). Nantahala Capital Management had $1.3 million invested in the company at the end of the quarter.
Let’s go over hedge fund activity in other stocks similar to Streamline Health Solutions Inc. (NASDAQ:STRM). We will take a look at Dover Downs Gaming & Entertainment, Inc. (NYSE:DDE), OpGen Inc (NASDAQ:OPGN), Neovasc Inc. (NASDAQ:NVCN), and Vertex Energy Inc (NASDAQ:VTNR). This group of stocks’ market caps resemble STRM’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DDE | 4 | 2296 | 0 |
| OPGN | 3 | 3724 | -1 |
| NVCN | 5 | 864 | -1 |
| VTNR | 4 | 4070 | 1 |
As you can see these stocks had an average of 4 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $6 million in STRM’s case. Neovasc Inc. (NASDAQ:NVCN) is the most popular stock in this table. On the other hand OpGen Inc (NASDAQ:OPGN) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Streamline Health Solutions Inc. (NASDAQ:STRM) 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.
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