Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
In this article, we’ll discuss the hedge fund activity surrounding CommerceHub Inc (NASDAQ:CHUBK). The company’s stock started trading in July after it was spun off from Liberty Interactive Corporation. At the end of September 22 funds from our database held shares of the company. At the end of this article we will also compare CHUBK to other stocks including TrustCo Bank Corp NY (NASDAQ:TRST), Flushing Financial Corporation (NASDAQ:FFIC), and Civitas Solutions Inc (NYSE:CIVI) to get a better sense of its popularity.
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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Now, let’s take a peek at the recent action regarding CommerceHub Inc (NASDAQ:CHUBK).
How have hedgies been trading CommerceHub Inc (NASDAQ:CHUBK)?
As stated earlier, 22 funds tracked by Insider Monkey were long CommerceHub at the end of the third quarter. Let’s take a closer look at some funds that amassed the largest stakes in the company.
Of the funds tracked by Insider Monkey, FPR Partners, led by Bob Peck and Andy Raab, holds the biggest position in CommerceHub Inc (NASDAQ:CHUBK). FPR Partners has a $36.1 million position in the stock, comprising 0.8% of its 13F portfolio. The second largest stake is held by Atalan Capital, led by David Thomas, which disclosed a $13.4 million position; 6.4% of its 13F portfolio is allocated to the company. Remaining members of the smart money with similar optimism encompass Stephen J. Errico’s Locust Wood Capital Advisers, Eli Cohen’s Crescent Park Management and Steve Pei’s Gratia Capital. We should note that Atalan Capital is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
On the next page, we’ll compare the hedge fund sentiment towards CommerceHub, with the sentiment towards other similarly-valued companies.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as CommerceHub Inc (NASDAQ:CHUBK) but similarly valued. These stocks are TrustCo Bank Corp NY (NASDAQ:TRST), Flushing Financial Corporation (NASDAQ:FFIC), Civitas Solutions Inc (NYSE:CIVI), and MGP Ingredients Inc (NASDAQ:MGPI). This group of stocks’ market caps match CHUBK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TRST | 11 | 75047 | 0 |
| FFIC | 10 | 42509 | 3 |
| CIVI | 8 | 9503 | 1 |
| MGPI | 8 | 53307 | 1 |
As you can see these stocks had an average of nine investors with bullish positions and the average amount invested in these stocks was $45 million. That figure was $139 million in CHUBK’s case. TrustCo Bank Corp NY (NASDAQ:TRST) is the most popular stock in this table. On the other hand Civitas Solutions Inc (NYSE:CIVI) is the least popular one with only eight bullish hedge fund positions. Compared to these stocks CommerceHub Inc (NASDAQ:CHUBK) 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.
Disclosure: none
