Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
Tiffany & Co. (NYSE:TIF) was in 33 hedge funds’ portfolios at the end of September. TIF shareholders have witnessed an increase in enthusiasm from smart money lately. There were 26 hedge funds in our database with TIF 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 F5 Networks, Inc. (NASDAQ:FFIV), PVH Corp (NYSE:PVH), and Marine Harvest ASA (NYSE:MHG) to gather more data points.
Follow Tiffany & Co (NYSE:TIF)
Follow Tiffany & Co (NYSE:TIF)
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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Now, let’s analyze the fresh action regarding Tiffany & Co. (NYSE:TIF).
How are hedge funds trading Tiffany & Co. (NYSE:TIF)?
At the end of the third quarter, a total of 33 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 27% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Charles de Vaulx’s International Value Advisers has the number one position in Tiffany & Co. (NYSE:TIF), worth close to $82.4 million and comprising 2.4% of its total 13F portfolio. On International Value Advisers’s heels is Manikay Partners, managed by Shane Finemore, which holds a $72.6 million position; 3.4% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors that are bullish include John W. Rogers’s Ariel Investments, and Anand Parekh’s Alyeska Investment Group.
As one would reasonably expect, key money managers were leading the bulls’ herd. Alyeska Investment Group, managed by Anand Parekh, created the most outsized position in Tiffany & Co. (NYSE:TIF). The fund had $35.5 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also made a $27.1 million investment in the stock during the quarter. The other funds with new positions in the stock are Ken Griffin’s Citadel Investment Group, Phill Gross and Robert Atchinson’s Adage Capital Management, and Louis Bacon’s Moore Global Investments.
Let’s also examine hedge fund activity in other stocks similar to Tiffany & Co. (NYSE:TIF). We will take a look at F5 Networks, Inc. (NASDAQ:FFIV), PVH Corp (NYSE:PVH), Marine Harvest ASA (NYSE:MHG), and Affiliated Managers Group, Inc. (NYSE:AMG). This group of stocks’ market caps match TIF’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FFIV | 32 | 833233 | 1 |
| PVH | 32 | 1245488 | -1 |
| MHG | 5 | 15500 | 0 |
| AMG | 35 | 746567 | 1 |
As you can see these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $710 million. That figure was $497 million in TIF’s case. Affiliated Managers Group, Inc. (NYSE:AMG) is the most popular stock in this table. On the other hand Marine Harvest ASA (NYSE:MHG) is the least popular one with only 5 bullish hedge fund positions. Tiffany & Co. (NYSE:TIF) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard AMG might be a better candidate to consider a long position.
Disclosure: none.
