Hedge funds and other investment firms that we track manage billions of dollars of their wealthy clients' money, and needless to say, they are painstakingly thorough when analyzing where to invest this money, as their own wealth also depends on it. Regardless of the various methods used by elite investors like David Tepper and David Abrams, the resources they expend are second-to-none. This is especially valuable when it comes to small-cap stocks, which is where they generate their strongest outperformance, as their resources give them a huge edge when it comes to studying these stocks compared to the average investor, which is why we intently follow their activity in the small-cap space. Nevertheless, it is also possible to identify cheap large cap stocks by following the footsteps of best performing hedge funds.
National Beverage Corp. (NASDAQ:FIZZ) was in 22 hedge funds' portfolios at the end of June. FIZZ investors should pay attention to an increase in activity from the world's largest hedge funds in recent months. There were 21 hedge funds in our database with FIZZ holdings at the end of the previous quarter. Our calculations also showed that FIZZ isn't among the 30 most popular stocks among hedge funds (view the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
To most stock holders, hedge funds are perceived as slow, old investment tools of years past. While there are more than 8000 funds with their doors open at the moment, We choose to focus on the aristocrats of this club, about 750 funds. These money managers command the lion's share of all hedge funds' total asset base, and by keeping an eye on their matchless equity investments, Insider Monkey has formulated a number of investment strategies that have historically exceeded the S&P 500 index. Insider Monkey's flagship hedge fund strategy surpassed the S&P 500 index by around 5 percentage points a year 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 take a look at the recent hedge fund action encompassing National Beverage Corp. (NASDAQ:FIZZ).
What have hedge funds been doing with National Beverage Corp. (NASDAQ:FIZZ)?
At Q2's end, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 5% from the previous quarter. On the other hand, there were a total of 15 hedge funds with a bullish position in FIZZ a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
The largest stake in National Beverage Corp. (NASDAQ:FIZZ) was held by Renaissance Technologies, which reported holding $119.2 million worth of stock at the end of March. It was followed by GLG Partners with a $23.8 million position. Other investors bullish on the company included Millennium Management, Woodson Capital Management, and GMT Capital.
Consequently, specific money managers have jumped into National Beverage Corp. (NASDAQ:FIZZ) headfirst. Two Sigma Advisors, managed by John Overdeck and David Siegel, assembled the largest position in National Beverage Corp. (NASDAQ:FIZZ). Two Sigma Advisors had $8.4 million invested in the company at the end of the quarter. Michael Gelband's ExodusPoint Capital also initiated a $0.9 million position during the quarter. The other funds with new positions in the stock are Peter Algert and Kevin Coldiron's Algert Coldiron Investors, D. E. Shaw's D E Shaw, and Paul Tudor Jones's Tudor Investment Corp.
Let's go over hedge fund activity in other stocks similar to National Beverage Corp. (NASDAQ:FIZZ). We will take a look at Insight Enterprises, Inc. (NASDAQ:NSIT), Zogenix, Inc. (NASDAQ:ZGNX), Amneal Pharmaceuticals, Inc. (NYSE:AMRX), and Invesco Mortgage Capital Inc (NYSE:IVR). This group of stocks' market values resemble FIZZ's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NSIT,14,121508,-3 ZGNX,28,1046228,-9 AMRX,10,36610,2 IVR,11,69179,-4 Average,15.75,318381,-3.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.75 hedge funds with bullish positions and the average amount invested in these stocks was $318 million. That figure was $262 million in FIZZ's case. Zogenix, Inc. (NASDAQ:ZGNX) is the most popular stock in this table. On the other hand Amneal Pharmaceuticals, Inc. (NYSE:AMRX) is the least popular one with only 10 bullish hedge fund positions. National Beverage Corp. (NASDAQ:FIZZ) 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. 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. Unfortunately FIZZ wasn't nearly as popular as these 20 stocks and hedge funds that were betting on FIZZ were disappointed as the stock returned -0.6% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.