The “smart money” on Wall Street isn’t always very smart. After all, active management — that is, stock pickers who make their own portfolios instead of just following an index like the S&P 500 — chronically underperforms.
But it’s undeniable that the smart money has power. After all, hedge funds with billions of dollars at their disposal can move the market when they deploy that cash.
And if you’re in a stock they are buying before they let loose the fire hose of cash, you can make a pretty penny in the process.
The good news is that if you take the time to dig, you can find out what these big money managers are buying — and that’s exactly what the investing team over at NerdWallet did via its hedge fund tracker. NerdWallet recently examined the current and past holdings of some of the largest U.S. hedge funds by poring through their 13-F filings with the SEC to unearth the small-cap stocks that hedge funds are hoarding right now.
Here’s the list of the hottest small-cap stocks among hedge funds now: