At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.
Luxoft Holding Inc (NYSE:LXFT) shareholders have witnessed an increase in hedge fund sentiment in recent months. At the end of this article we will also compare LXFT to other stocks including Phibro Animal Health Corp (NASDAQ:PAHC), Stag Industrial Inc (NYSE:STAG), and Seritage Growth Properties (NYSE:SRG) to get a better sense of its popularity.
With all of this in mind, let’s take a glance at the recent action surrounding Luxoft Holding Inc (NYSE:LXFT).
How are hedge funds trading Luxoft Holding Inc (NYSE:LXFT)?
At Q3’s end, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 21% from the previous quarter. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Bloom Tree Partners, managed by Alok Agrawal, holds the largest position in Luxoft Holding Inc (NYSE:LXFT). Bloom Tree Partners has a $29.1 million position in the stock, comprising 2.7% of its 13F portfolio. On Bloom Tree Partners’s heels is Sahm Adrangi of Kerrisdale Capital, with a $19.6 million position; 5.7% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that are bullish include Richard Driehaus’s Driehaus Capital, Gunnar Overstrom’s Three Corner Global Investors and D E Shaw.
As industrywide interest jumped, key money managers have jumped into Luxoft Holding Inc (NYSE:LXFT) headfirst. Prince Street Capital Management, managed by David Halpert, established the biggest position in Luxoft Holding Inc (NYSE:LXFT). Prince Street Capital Management had $4.3 million invested in the company at the end of the quarter. Neil Chriss’s Hutchin Hill Capital also initiated a $2.3 million position during the quarter. The only other fund with a brand new LXFT position is Chao Ku’s Nine Chapters Capital Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Luxoft Holding Inc (NYSE:LXFT) but similarly valued. We will take a look at Phibro Animal Health Corp (NASDAQ:PAHC), Stag Industrial Inc (NYSE:STAG), Seritage Growth Properties (NYSE:SRG), and Oxford Industries, Inc. (NYSE:OXM). All of these stocks’ market caps match LXFT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PAHC | 16 | 29428 | 1 |
| STAG | 9 | 69982 | 0 |
| SRG | 23 | 470019 | 23 |
| OXM | 23 | 164135 | 2 |
As you can see these stocks had an average of 17.75 hedge funds with bullish positions and the average amount invested in these stocks was $183 million. That figure was $131 million in LXFT’s case. Seritage Growth Properties (NYSE:SRG) is the most popular stock in this table. On the other hand Stag Industrial Inc (NYSE:STAG) is the least popular one with only 9 bullish hedge fund positions. Luxoft Holding Inc (NYSE:LXFT) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SRG might be a better candidate to consider a long position.