Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: Box Inc (NYSE:BOX).
Is Box Inc (NYSE:BOX) an outstanding stock to buy now? Hedge funds believe so, as they are buying. The number of long hedge fund bets rose by 7 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 EP Energy Corp (NYSE:EPE), United Community Banks Inc (NASDAQ:UCBI), and TASER International, Inc. (NASDAQ:TASR) to gather more data points.
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How are hedge funds trading Box Inc (NYSE:BOX)?
At Q3’s end, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 54% climb from the second quarter of 2016 and the fourth consecutive quarter in which more hedge funds have bought into the stock. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Bares Capital Management, managed by Brian Bares, holds the most valuable position in Box Inc (NYSE:BOX). Bares Capital Management has a $79.1 million position in the stock, comprising 4.7% of its 13F portfolio. Sitting at the No. 2 spot is Coatue Management, led by Philippe Laffont, holding a $32.1 million position. Some other professional money managers that hold long positions contain Matthew Knauer and Mina Faltas’ Nokota Management and John Overdeck and David Siegel’s Two Sigma Advisors.
With general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. Dorsal Capital Management, managed by Ryan Frick and Oliver Evans, initiated the biggest position in Box Inc (NYSE:BOX). Dorsal Capital Management had $18.9 million invested in the position at the end of the quarter. George McCabe’s Portolan Capital Management also initiated a $5.3 million position during the quarter. The following funds were also among the new BOX investors: Jim Simons’ Renaissance Technologies, Ken Griffin’s Citadel Investment Group, and Peter Muller’s PDT Partners.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Box Inc (NYSE:BOX) but similarly valued. These stocks are EP Energy Corp (NYSE:EPE), United Community Banks Inc (NASDAQ:UCBI), TASER International, Inc. (NASDAQ:TASR), and CSG Systems International, Inc. (NASDAQ:CSGS). This group of stocks’ market caps resemble BOX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EPE | 15 | 18169 | 2 |
| UCBI | 12 | 106217 | -7 |
| TASR | 12 | 49132 | 2 |
| CSGS | 16 | 157761 | -3 |
As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $83 million. That figure was $189 million in BOX’s case. CSG Systems International, Inc. (NASDAQ:CSGS) is the most popular stock in this table. On the other hand United Community Banks Inc (NASDAQ:UCBI) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Box Inc (NYSE:BOX) is more popular among hedge funds and has more money invested in it than any of the other stocks. Considering that hedge funds are very fond of this stock in relation to its market cap peers and sentiment continues to rise, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
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