Legendary investors such as Jeffrey Talpins and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don't publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That's why we analyze the activity of those elite funds in these small-cap stocks. In the following paragraphs, we analyze Weis Markets, Inc. (NYSE:WMK) from the perspective of those elite funds.
Weis Markets, Inc. (NYSE:WMK) was in 13 hedge funds' portfolios at the end of June. WMK investors should be aware of a decrease in activity from the world's largest hedge funds in recent months. There were 15 hedge funds in our database with WMK holdings at the end of the previous quarter. Our calculations also showed that WMK isn't among the 30 most popular stocks among hedge funds (see the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most shareholders, hedge funds are seen as underperforming, outdated financial tools of yesteryear. While there are more than 8000 funds with their doors open at present, Our researchers choose to focus on the bigwigs of this club, around 750 funds. These money managers preside over the lion's share of the hedge fund industry's total asset base, and by watching their finest picks, Insider Monkey has unsheathed many investment strategies that have historically beaten the S&P 500 index. Insider Monkey's flagship hedge fund strategy exceeded the S&P 500 index by around 5 percentage points annually since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We're going to view the key hedge fund action encompassing Weis Markets, Inc. (NYSE:WMK).
How are hedge funds trading Weis Markets, Inc. (NYSE:WMK)?
At Q2's end, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of -13% from the previous quarter. On the other hand, there were a total of 14 hedge funds with a bullish position in WMK a year ago. With the smart money's capital changing hands, there exists a few notable hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
The largest stake in Weis Markets, Inc. (NYSE:WMK) was held by Royce & Associates, which reported holding $40.9 million worth of stock at the end of March. It was followed by Arrowstreet Capital with a $10.2 million position. Other investors bullish on the company included Renaissance Technologies, Citadel Investment Group, and GAMCO Investors.
Since Weis Markets, Inc. (NYSE:WMK) has faced a decline in interest from hedge fund managers, it's safe to say that there exists a select few hedgies that decided to sell off their full holdings by the end of the second quarter. At the top of the heap, Peter Algert and Kevin Coldiron's Algert Coldiron Investors cut the biggest position of the 750 funds monitored by Insider Monkey, worth close to $0.4 million in stock, and Michael Gelband's ExodusPoint Capital was right behind this move, as the fund dropped about $0.3 million worth. These transactions are important to note, as aggregate hedge fund interest fell by 2 funds by the end of the second quarter.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Weis Markets, Inc. (NYSE:WMK) but similarly valued. These stocks are Boot Barn Holdings Inc (NYSE:BOOT), ePlus Inc. (NASDAQ:PLUS), PJT Partners Inc (NYSE:PJT), and MeiraGTx Holdings plc (NASDAQ:MGTX). This group of stocks' market valuations are similar to WMK's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BOOT,22,185590,-1 PLUS,12,27761,3 PJT,15,142793,-4 MGTX,9,253019,-2 Average,14.5,152291,-1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.5 hedge funds with bullish positions and the average amount invested in these stocks was $152 million. That figure was $70 million in WMK's case. Boot Barn Holdings Inc (NYSE:BOOT) is the most popular stock in this table. On the other hand MeiraGTx Holdings plc (NASDAQ:MGTX) is the least popular one with only 9 bullish hedge fund positions. Weis Markets, Inc. (NYSE:WMK) 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 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. A small number of hedge funds were also right about betting on WMK, though not to the same extent, as the stock returned 5.7% during the third quarter and outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.