Elite hedge funds added to these high conviction positions during the December panic

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Question: If you’re a top hedge fund manager and the value of your highest conviction stock suddenly drops by 20%, what do you do? Answer: You buy more.

Late in 2018, investors panic-sold en masse. Indiscriminate selling. Babies thrown out with bathwater. While the public freaked-out about interest rates, trade wars and recessions, leading hedge funds added to their best ideas.

And luckily for investors, if a hedge fund owns 5% or more of a public company, the SEC mandates that it must promptly disclose further holdings changes of 1% or more. “Promptly” is generally understood to mean within two business days. If a fund has previously filed a 13G (a passive investor) or a 13D (an activist investor), denoting 5% ownership, further 1% holdings changes will be quickly seen by investors monitoring SEC filings.

For the savvy investor, studying amendments to 13D and 13G filings can be a treasure trove of information. Hedge funds spend extensive time and money on research. We can presume that if they average down on a top holding, they still like the story.

So, here’s an interesting approach: Follow the best hedge funds, with the smartest managers and leading performance, and when there’s a market downdraft, see which of their 5% holdings they add to – or sell. Below we did just that.

First, we used WhaleWisdom.com to identify the best performing hedge funds over recent years and months. We did this by comparing WhaleScores – a ranking of funds that calculates risk-return performance measures over recent periods and may predict future outperformance. Note that most of the hedge funds on the list are relatively small and obscure. Why? Because small, less well-known hedge funds typically outperform the larger, more famous ones.

Then we pulled up 13D and 13G filing amendments of these top funds since Dec. 1 – when the market panic began to intensify. We eliminated funds with less than 10 holdings. We also included top funds that reduced holdings in 5%+ positions. As always, do your homework before investing.

Hedge Fund Filer

Whalescore

Stock Symbol Event Date % Ownership New Position Previous % Change
TRIGRAN INVESTMENTS, INC.

95

Farmer Brothers Co FARM 2018-12-31

10.2

1,729,685

1,433,932

20.63%

FIRST LIGHT ASSET MANAGEMENT, LLC

94

Repro-Med System Inc. REPR 2018-12-17

17.79

6,800,000

  New 13G
KAYNE ANDERSON RUDNICK INVESTMENT MANAGEMENT LLC

93

U.S. Physical Therapy, Inc. USPH 2018-12-31

10.98

1,393,141

727,680

91.45%

WHALE ROCK CAPITAL MANAGEMENT LLC

92

Smartsheet Inc Class A SMAR 2018-12-19

5.66

1,634,943

639,153

155.80%

HARBOURVEST PARTNERS LLC

91

OncoMed Pharmaceuticals Inc OMED 2018-12-17

5.02

1,941,108

  New 13G
ARCHON CAPITAL MANAGEMENT LLC

89

ConforMIS Inc CFMS 2018-12-12

12.02

7,610,455

5,601,985

35.85%

SPRUCE HOUSE INVESTMENT MANAGEMENT LLC

89

XPO Logistics Inc XPO 2018-12-19

10.08

12,797,065

7,750,000

65.12%

SPRUCE HOUSE INVESTMENT MANAGEMENT LLC

89

GTT Communications Inc GTT 2018-12-21

20

10,900,000

10,900,000

New 13D
MAK CAPITAL ONE LLC

88

Skyline Champion Corp SKY 2018-12-05

9.8

5,539,759

5,689,759

-2.64%

BAILLIE GIFFORD & COMPANY

88

Eventbrite Inc EB 2018-12-31

12.86

1,478,881

  New 13G
BAILLIE GIFFORD & COMPANY

88

Kirby Corp KEX 2018-12-31

12.84

7,688,603

5,700,947

34.87%

BAILLIE GIFFORD & COMPANY

88

Baidu Inc ADR BIDU 2018-12-31

6.55

19,924,513

18,477,154

7.83%

BAILLIE GIFFORD & COMPANY

88

Apache Corp. APA 2018-12-31

6.42

24,364,489

24,398,441

-0.14%

BAILLIE GIFFORD & COMPANY

88

DexCom Inc DXCM 2018-12-31

5.55

4,929,415

5,094,197

-3.23%

PL CAPITAL ADVISORS, LLC

86

Old Point Financial Corp OPOF 2018-12-21

7.2

370,614

319,114

16.14%

MANGROVE PARTNERS

86

Atlantic Power Corp AT 2018-12-26

8.3

9,150,068

7,977,910

14.69%

CANNELL CAPITAL LLC

85

Health Insurance Innovations Inc HIIQ 2018-12-26

5.4

776,836

466,007

66.70%

CANNELL CAPITAL LLC

85

Lee Enterprises, Inc. LEE 2018-12-26

4.22

2,414,129

2,067,229

16.78%

CANNELL CAPITAL LLC

85

Ring Energy Inc REI 2018-12-26

5.02

3,039,848

1,620,516

87.59%

CANNELL CAPITAL LLC

85

Health Insurance Innovations Inc HIIQ 2019-01-08

5.4

776,836

776,836

New 13D
SYLEBRA HK COMPANY LTD

84

Domo Inc DOMO 2018-12-31

10.4

2,388,292

1,341,918

77.98%

NORTHERN RIGHT CAPITAL MANAGEMENT, L.P.

83

EMCORE Corp. EMKR 2018-12-21

6.6

1,811,038

1,507,969

20.10%

PRIMECAP MANAGEMENT COMPANY

83

iRobot Corp IRBT 2018-12-31

14.92

4,130,500

4,161,600

-0.75%

PRIMECAP MANAGEMENT COMPANY

83

Alkermes Plc. ALKS 2018-12-31

15

23,307,228

23,273,068

0.15%

CAPITAL RESEARCH GLOBAL INVESTORS

83

Western Union Co (The) WU 2018-12-31

7.8

34,428,162

35,154,911

-2.07%

SEIDMAN LAWRENCE B

82

Bankwell Financial Group Inc BWFG 2018-12-12

5

392,045

192,921

103.22%

SEIDMAN LAWRENCE B

82

HV Bancorp Inc HVBC 2018-12-14

9.23

208,614

176,557

18.16%

SEIDMAN LAWRENCE B

82

Bankwell Financial Group Inc BWFG 2018-12-19

6.02

472,045

392,045

20.41%

SEIDMAN LAWRENCE B

82

Malvern Bancorp Inc MLVF 2018-12-24

7.93

616,252

454,761

35.51%

SEIDMAN LAWRENCE B

82

Bankwell Financial Group Inc BWFG 2018-12-28

7.29

572,045

472,045

21.18%

MINERVA ADVISORS LLC

81

A.H. Belo Corp AHC 2018-12-21

5

2,600

941,040

-99.72%

TOWLE & COMPANY

80

Pier 1 Imports, Inc. PIR 2018-12-31

0

213,880

10,974,125

-98.05%

ICAHN CARL C

79

Conduent Inc CNDT 2018-12-03

9.31

24,586,540

22,306,000

10.22%

ICAHN CARL C

79

American Railcar Industries Inc ARII 2018-12-05

0

0

11,871,268

-100.00%

ICAHN CARL C

79

Icahn Enterprises LP IEP 2018-12-18

91.7

175,441,588

170,793,800

2.72%

ICAHN CARL C

79

Newell Brands Inc NWL 2018-12-19

9.89

41,832,250

38,700,000

8.09%

ICAHN CARL C

79

Dell Technologies Inc DELL 2018-12-28

0

0

18,529,497

-100.00%

ICAHN CARL C

79

Dell Technologies Class C (2018 issue) DELL 2018-12-28

6.3

10,900,017

  New
VAN DEN BERG MANAGEMENT I, INC

79

PHI, Inc. Non-Voting Shares PHIIK 2018-12-31

10.13

1,308,515

1,211,751

7.99%

VAN DEN BERG MANAGEMENT I, INC

79

Comstock Mining Inc LODE 2018-12-31

6.61

4,684,254

5,387,853

-13.06%

SILVER LAKE GROUP, L.L.C.

78

Madison Square Garden Company MSG 2018-12-07

4.8

1,621,462

1,427,062

13.62%

GREAT POINT PARTNERS LLC

78

MILLENDO THERAPEUTICS INC MLND 2018-12-07

9.95

1,285,068

  New 13G
SILVER LAKE GROUP, L.L.C.

78

Madison Square Garden Company MSG 2018-12-21

4.9

1,865,862

1,621,462

15.07%

SILVER LAKE GROUP, L.L.C.

78

Vmware Inc VMW 2018-12-25

0

0

330,678,605

-100.00%

CARLSON CAPITAL L P

78

Lyon William Homes WLH 2018-12-28

5.12

1,062,514

377,700

181.31%

CAPITAL WORLD INVESTORS

78

Henry (Jack) & Associates, Inc. JKHY 2018-12-31

10

7,799,552

6,876,882

13.42%

CAPITAL WORLD INVESTORS

78

Digital Realty Trust, Inc. DLR 2018-12-31

10.2

21,093,035

15,314,435

37.73%

SHAH CAPITAL MANAGEMENT

77

ReneSola Ltd ADR SOL 2018-12-31

9.58

3,645,139

3,334,730

9.31%

STARBOARD VALUE LP

76

Magellan Health Inc MGLN 2018-12-03

9.8

1,704,582

  New 13D
STARBOARD VALUE LP

76

Forest City Enterprises, Inc. Class A FCE.A 2018-12-07

0

0

15,272,223

-100.00%

ANSON FUNDS MANAGEMENT LP

76

Tonix Pharmaceuticals Holding Corp TNXP 2018-12-10

6.3

150,000

  New 13G
NOVO HOLDINGS A

76

Menlo Therapeutics Inc MNLO 2019-01-03

0

0

1,436,313

-100.00%

Disclaimer: Do not construe anything written in this post or this blog in its entirety as a recommendation, research, or an offer to buy or sell any securities. Everything in this post is meant for educational and entertainment purposes only. I or my affiliates may hold positions in securities mentioned in the article.