Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: Web.com Group, Inc. (NASDAQ:WEB).
Web.com Group, Inc. (NASDAQ:WEB) shareholders have witnessed an increase in enthusiasm from smart money recently. WEB was in 24 hedge funds' portfolios at the end of September. There were 23 hedge funds in our database with WEB positions at the end of the previous quarter. Our calculations also showed that WEB isn't among the 30 most popular stocks among hedge funds.
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We're going to view the latest hedge fund action regarding Web.com Group, Inc. (NASDAQ:WEB).
What have hedge funds been doing with Web.com Group, Inc. (NASDAQ:WEB)?
At Q3's end, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in WEB over the last 13 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Web.com Group, Inc. (NASDAQ:WEB) was held by Sand Grove Capital Partners, which reported holding $121.6 million worth of stock at the end of September. It was followed by Starboard Value LP with a $118.3 million position. Other investors bullish on the company included Beryl Capital Management, Millennium Management, and Polaris Capital Management.
As industrywide interest jumped, key hedge funds were breaking ground themselves. Impax Asset Management, managed by Ian Simm, established the most outsized position in Web.com Group, Inc. (NASDAQ:WEB). Impax Asset Management had $16.1 million invested in the company at the end of the quarter. John Bader's Halcyon Asset Management also initiated a $8.3 million position during the quarter. The following funds were also among the new WEB investors: Anand Parekh's Alyeska Investment Group and Ken Griffin's Citadel Investment Group.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Web.com Group, Inc. (NASDAQ:WEB) but similarly valued. We will take a look at Continental Building Products Inc (NYSE:CBPX), Interface, Inc. (NASDAQ:TILE), Kite Realty Group Trust (NYSE:KRG), and The Liberty Braves Group (NASDAQ:BATRK). This group of stocks' market caps match WEB's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CBPX,18,115523,-2 TILE,17,96988,-1 KRG,13,32991,1 BATRK,26,405822,3 Average,18.5,162831,0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.5 hedge funds with bullish positions and the average amount invested in these stocks was $163 million. That figure was $481 million in WEB's case. The Liberty Braves Group (NASDAQ:BATRK) is the most popular stock in this table. On the other hand Kite Realty Group Trust (NYSE:KRG) is the least popular one with only 13 bullish hedge fund positions. Web.com Group, Inc. (NASDAQ:WEB) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. In this regard BATRK might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.