There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other elite funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze WCI Communities Inc (NYSE:WCIC).
WCI Communities Inc (NYSE:WCIC) was in 22 hedge funds’ portfolios at the end of September. WCI Communities Inc (NYSE:WCIC) investors should be aware of an increase in hedge fund sentiment lately. There were 14 hedge funds in our database with WCI Communities Inc (NYSE:WCIC) 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 H&E Equipment Services, Inc. (NASDAQ:HEES), ICF International Inc (NASDAQ:ICFI), and Chart Industries, Inc. (NASDAQ:GTLS) to gather more data points.
Follow Wci Communities Inc. (NYSE:WCIC)
Follow Wci Communities Inc. (NYSE:WCIC)
Today, there are a lot of methods investors have at their disposal to value their stock investments. Some of the less utilized methods are hedge fund and insider trading activity. We have shown that, historically, those who follow the top picks of the best hedge fund managers can outpace the market by a superb margin (see the details here).
Keeping this in mind, let’s check out the key action encompassing WCI Communities Inc (NYSE:WCIC).
What does the smart money think about WCI Communities Inc (NYSE:WCIC)?
Heading into Q4, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 57% from the previous quarter. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Michael Weinstock’s Monarch Alternative Capital has the largest position in WCI Communities Inc (NYSE:WCIC), worth close to $53.7 million, accounting for 18.9% of its total 13F portfolio. On Monarch Alternative Capital’s heels is Covalent Capital Partners, led by Robert Hockett, holding a $21.5 million position; the fund has 4.5% of its 13F portfolio invested in the stock. Hedge funds and other institutional investors with similar optimism consist of Ken Griffin’s Citadel Investment Group, David Keidan’s Buckingham Capital Management, and Martin Whitman’s Third Avenue Management.
As one would reasonably expect, key hedge funds have been driving this bullishness. Buckingham Capital Management assembled the most valuable position in WCI Communities Inc (NYSE:WCIC). Buckingham Capital Management had $13.1 million invested in the company at the end of the quarter. Simon Sadler’s Segantii Capital also made a $11 million investment in the stock during the quarter. The other funds with new positions in the stock are Israel Englander’s Millennium Management, George McCabe’s Portolan Capital Management, and Leon Cooperman’s Omega Advisors.
Let’s now take a look at hedge fund activity in other stocks similar to WCI Communities Inc (NYSE:WCIC). We will take a look at H&E Equipment Services, Inc. (NASDAQ:HEES), ICF International Inc (NASDAQ:ICFI), Chart Industries, Inc. (NASDAQ:GTLS), and Novadaq Technologies Inc. (NASDAQ:NVDQ). All of these stocks’ market caps are similar to WCI Communities Inc (NYSE:WCIC)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HEES | 11 | 26047 | -6 |
| ICFI | 14 | 70187 | 1 |
| GTLS | 14 | 48613 | -7 |
| NVDQ | 9 | 47230 | -1 |
As you can see, these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $48 million. That figure was $165 million in WCI Communities Inc (NYSE:WCIC)’s case. ICF International Inc (NASDAQ:ICFI) is the most popular stock in this table. On the other hand, Novadaq Technologies Inc. (NASDAQ:NVDQ) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks, WCI Communities Inc (NYSE:WCIC) 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.
