Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is the small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we follow the hedge fund activity in the small-cap space.
JG Wentworth Co (NYSE:JGW) shareholders have witnessed a decrease in hedge fund sentiment in recent months. At the end of this article we will also compare JGW to other stocks including API Technologies Corp (NASDAQ:ATNY), Performant Financial Corp (NASDAQ:PFMT), and DryShips Inc. (NASDAQ:DRYS) to get a better sense of its popularity.
Follow J.g. Wentworth Co (NYSE:JGWE)
Follow J.g. Wentworth Co (NYSE:JGWE)
Keeping this in mind, we’re going to view the key action surrounding JG Wentworth Co (NYSE:JGW).
How have hedgies been trading JG Wentworth Co (NYSE:JGW)?
Heading into Q4, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of -50% from the second quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Jeff Buick’s Trishield Capital Management has the number one position in JG Wentworth Co (NYSE:JGW), worth close to $13.9 million, comprising 15.5% of its total 13F portfolio. The second largest stake is held by Whitebox Advisors, led by Andy Redleaf, holding a $5.2 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish comprise Ken Griffin’s Citadel Investment Group, and Chuck Royce’s Royce & Associates .
Seeing as JG Wentworth Co (NYSE:JGW) has witnessed bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there exists a select few hedgies who sold off their full holdings by the end of the third quarter. At the top of the heap, Steve Galbraith’s Herring Creek Capital said goodbye to the largest investment of the “upper crust” of funds monitored by Insider Monkey, worth an estimated $0.8 million in stock, and Chao Ku’s Nine Chapters Capital Management was right behind this move, as the fund cut about $0.3 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 4 funds by the end of the third quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as JG Wentworth Co (NYSE:JGW) but similarly valued. We will take a look at API Technologies Corp (NASDAQ:ATNY), Performant Financial Corp (NASDAQ:PFMT), DryShips Inc. (NASDAQ:DRYS), and Marinus Pharmaceuticals Inc (NASDAQ:MRNS). This group of stocks’ market values match JGW’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ATNY | 5 | 25565 | 0 |
| PFMT | 11 | 16411 | -1 |
| DRYS | 9 | 3612 | 1 |
| MRNS | 7 | 5007 | 4 |
As you can see these stocks had an average of an 8 hedge funds with bullish positions and the average amount invested in these stocks was $13 million. That figure was $22 million in JGW’s case. Performant Financial Corp (NASDAQ:PFMT) is the most popular stock in this table. On the other hand API Technologies Corp (NASDAQ:ATNY) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks JG Wentworth Co (NYSE:JGW) is even less popular than ATNY. 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.
