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By: Alex Oleinic

Several weeks after the end of each calendar quarter, institutional investors file their 13F forms with the SEC, disclosing their U.S. listed equity holdings. One filing that is worth taking a look at is that of the Canada-based Van Berkom & Associates, which is known for its focus on companies with smaller market capitalizations. See the original 13F here.

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Empirical research has revealed that hedge fund sentiment can be put to use by retail investors if they know where to look. Specifically, it's been found that the best picks of the best funds can beat the market by as much as 18 percentage points annually (discover the method behind this strategy here).

Education is a good investment

Grand Canyon Education (NASDAQ:LOPE), a company engaged in providing post-secondary education services via online access, rules the list. Van Berkom was bullish on this holding in the first quarter, increasing the number of shares it held from 86,501 to a whopping 2,167,992. Grand Canyon Education looks to have some value in it; even though it has posted a year-to-date return of above 25%, it is still trading at a forward P/E near 15.0x. For the previous quarter, the net revenue of Grand Canyon Education jumped by 21.3% year-over-year to $142 million. Interestingly, 13 of the 450 elite hedge funds we track were bullish on Grand Canyon Education heading into 2013, which is some solid backing to have, especially for a small-cap name.

The best of the rest

In Iconix Brand Group (NASDAQ:ICON), the fund disclosed an almost $49 million stake, a value raised from the $40.6 million reported in its previous 13F. Van Berkom now owns 1,893,337 shares of ICON stock, up from the 1,819,068 shares it held at the end of December. Our database shows that eight hedge funds were invested in Iconix Brand Group at the end of December, so this is another modestly supported stock. Iconix posted an annual 19% increase in revenue last quarter, amounting to $105.1 million. Non-GAAP diluted EPS spiked by 26% to $0.54, and the company updated its full-year bottom line outlook to $2.10-2.20, up from $2.05-$2.15. A year-to-date return of 31% is impressive, but it's quite possible that there's more room to run here.

Two other holdings have identical values of $47.5 million each: Brown & Brown (NYSE:BRO) and Neustar (NYSE:NSR). In Brown & Brown, the fund disclosed a position of 1,481,139 shares, up slightly from the 1,460,840 reported in the previous 13F filing. Brown & Brown shares have popped 24.6% in 2013 thus far, on the back of impressive earnings growth. The company recently reported a quarterly net income of $60.1 million ($0.41 per share), up by 21.6% year-over-year.

Neustar, meanwhile, is a company in which Van Berkom owns 1,019,905 shares. In the previous 13F filing, the fund disclosed a $44.2 million stake of 1,053,072 shares. Neustar announced that its revenue appreciated by an annual 8% to $216.4 million, while its net income per share remained flat at $0.50. Neustar's stock price is trading at a forward P/E of 12.6x, which is fairly cheaper than many of its industry peers, eighth lowest in the 32-stock diversified communication services industry.

Last but not least

In the equity portfolio of Van Berkom, Universal Health Services (NYSE:UHS) represents a $45.3 million position. The firm owns 709,960 shares of Universal Health Services, down from 804,990 shares reported in the previous filing. The previous value of the holding was $38.9 million. Interestingly, Universal Health Services shares sport a year-to-date return of nearly 40%, and are trading at a forward P/E of 13.2x, indicating that it may be too early to call a top just yet. Close to three-dozen hedge funds from our 450-fund database held shares of Universal Health Services heading into 2013, which again, is a solid support group.

To continue preparing for the current 13F-filing season, learn more details of how to track hedge funds and other prominent investors here.

Source: Canadian Firm Is Looking At These Small-Caps: Here's What You Should Know