What Do Hedge Funds Think of Stock Building Supply Holdings Inc (STCK)?

Like everyone else, elite investors make mistakes. Some of their top consensus picks, such as Micron and Anadarko Petroleum, have not done well during the last 12 months ending in October due to various reasons. Nevertheless, the data show elite investors’ consensus picks have done well on average. The top 30 S&P 500 stocks among hedge funds at the end of September 2014 yielded an average return of 9.5% during the last four quarters ending in October and sixty three percent of these 30 stocks outperformed the market. S&P 500 Index returned only 5.2% during the same period and less than 49% of its constituents managed to beat this return. Because their consensus picks have done well, we pay attention to what elite funds think before doing extensive research on a stock. In this article, we take a closer look at Stock Building Supply Holdings Inc (NASDAQ:STCK) from the perspective of those elite funds.

Stock Building Supply Holdings Inc (NASDAQ:STCK) was in 11 hedge funds’ portfolios at the end of the third quarter of 2015. STCK shareholders have witnessed an increase in hedge fund interest of late. There were 10 hedge funds in our database with STCK positions 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 Acacia Research Corporation (NASDAQ:ACTG), DTS Inc. (NASDAQ:DTSI), and Gores Holdings Inc (NASDAQ:GRSHU) to gather more data points.

Keeping this in mind, we’re going to analyze the new action surrounding Stock Building Supply Holdings Inc (NASDAQ:STCK).

How have hedgies been trading Stock Building Supply Holdings Inc (NASDAQ:STCK)?

At Q3’s end, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of 10% from the second quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Crispin Odey’s Odey Asset Management Group has the most valuable position in Stock Building Supply Holdings Inc (NASDAQ:STCK), worth close to $41.4 million, accounting for 3.3% of its total 13F portfolio. Coming in second is ACK Asset Management, managed by Richard S. Meisenberg, which holds a $13.3 million position; the fund has 5.6% of its 13F portfolio invested in the stock. Other professional money managers that are bullish consist of David Keidan’s Buckingham Capital Management, Thomas E. Claugus’s GMT Capital and Marc Majzner’s Clearline Capital.

As one would reasonably expect, key hedge funds have been driving this bullishness. Buckingham Capital Management, managed by David Keidan, assembled the biggest position in Stock Building Supply Holdings Inc (NASDAQ:STCK). Buckingham Capital Management had $11.4 million invested in the company at the end of the quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Stock Building Supply Holdings Inc (NASDAQ:STCK) but similarly valued. These stocks are Acacia Research Corporation (NASDAQ:ACTG), DTS Inc. (NASDAQ:DTSI), Gores Holdings Inc (NASDAQ:GRSHU), and First PacTrust Bancorp, Inc. (NASDAQ:BANC). All of these stocks’ market caps match STCK’s market cap.

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $99 million. That figure was $87 million in STCK’s case. First PacTrust Bancorp, Inc. (NASDAQ:BANC) is the most popular stock in this table. On the other hand Acacia Research Corporation (NASDAQ:ACTG) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Stock Building Supply Holdings Inc (NASDAQ:STCK) is even less popular than ACTG. 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.