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Did Hedge Funds Drop The Ball On InterXion Holding NV (INXN) ?

Nina Todic

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 Jeff Ubben, George Soros and Carl Icahn 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 InterXion Holding NV (NYSE:INXN).

Is InterXion Holding NV (NYSE:INXN) a first-rate investment now? Money managers are turning less bullish. The number of long hedge fund positions went down by 3 lately. Our calculations also showed that inxn isn't among the 30 most popular stocks among hedge funds. INXN was in 25 hedge funds' portfolios at the end of the first quarter of 2019. There were 28 hedge funds in our database with INXN holdings at the end of the previous quarter.

Today there are numerous tools investors employ to evaluate stocks. Some of the most under-the-radar tools are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the top money managers can trounce the market by a very impressive amount (see the details here).

Ricky Sandler

We're going to review the recent hedge fund action regarding InterXion Holding NV (NYSE:INXN).

How have hedgies been trading InterXion Holding NV (NYSE:INXN)?

At Q1's end, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of -11% from the previous quarter. On the other hand, there were a total of 32 hedge funds with a bullish position in INXN a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds with INXN Positions

Of the funds tracked by Insider Monkey, Ricky Sandler's Eminence Capital has the biggest position in InterXion Holding NV (NYSE:INXN), worth close to $189.5 million, amounting to 2.8% of its total 13F portfolio. The second largest stake is held by Echo Street Capital Management, led by Greg Poole, holding a $128.1 million position; 2.5% of its 13F portfolio is allocated to the stock. Remaining members of the smart money with similar optimism contain Barry Lebovits and Joshua Kuntz's Rivulet Capital, Josh Resnick's Jericho Capital Asset Management and Ken Griffin's Citadel Investment Group.

Judging by the fact that InterXion Holding NV (NYSE:INXN) has faced a decline in interest from the entirety of the hedge funds we track, it's easy to see that there was a specific group of funds who were dropping their full holdings last quarter. Intriguingly, Edmond M. Safra's EMS Capital dumped the largest investment of the 700 funds watched by Insider Monkey, valued at about $14.5 million in stock, and Louis Bacon's Moore Global Investments was right behind this move, as the fund said goodbye to about $9.7 million worth. These transactions are intriguing to say the least, as total hedge fund interest was cut by 3 funds last quarter.

Let's go over hedge fund activity in other stocks similar to InterXion Holding NV (NYSE:INXN). We will take a look at argenx SE (NASDAQ:ARGX), Integra Lifesciences Holdings Corp (NASDAQ:IART), The Howard Hughes Corporation (NYSE:HHC), and Ascendis Pharma A/S (NASDAQ:ASND). This group of stocks' market caps match INXN's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ARGX,24,750610,-3 IART,19,159928,1 HHC,22,471962,-4 ASND,35,2904435,9 Average,25,1071734,0.75 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $1072 million. That figure was $742 million in INXN's case. Ascendis Pharma A/S (NASDAQ:ASND) is the most popular stock in this table. On the other hand Integra Lifesciences Holdings Corp (NASDAQ:IART) is the least popular one with only 19 bullish hedge fund positions. InterXion Holding NV (NYSE:INXN) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. A small number of hedge funds were also right about betting on INXN as the stock returned 10% during the same time frame and outperformed the market by an even larger margin.

Disclosure: None. This article was originally published at Insider Monkey.

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