Is CCJ A Good Stock To Buy Now?
Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Cameco Corporation (NYSE:CCJ).
Is CCJ a good stock to buy now? Cameco Corporation (NYSE:CCJ) investors should be aware of a decrease in hedge fund sentiment of late. Cameco Corporation (NYSE:CCJ) was in 20 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistic is 28. There were 22 hedge funds in our database with CCJ holdings at the end of June. Our calculations also showed that CCJ isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
To the average investor there are plenty of indicators market participants can use to grade publicly traded companies. A couple of the most underrated indicators are hedge fund and insider trading moves. We have shown that, historically, those who follow the top picks of the elite fund managers can trounce the broader indices by a healthy amount (see the details here).
Phillip Gross of Adage Capital
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind let's review the key hedge fund action surrounding Cameco Corporation (NYSE:CCJ).
Do Hedge Funds Think CCJ Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -9% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CCJ over the last 21 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Cameco Corporation (NYSE:CCJ) was held by Kopernik Global Investors, which reported holding $117 million worth of stock at the end of September. It was followed by Adage Capital Management with a $45.3 million position. Other investors bullish on the company included Renaissance Technologies, Moerus Capital Management, and D E Shaw. In terms of the portfolio weights assigned to each position Kopernik Global Investors allocated the biggest weight to Cameco Corporation (NYSE:CCJ), around 18.14% of its 13F portfolio. Moerus Capital Management is also relatively very bullish on the stock, designating 8.72 percent of its 13F equity portfolio to CCJ.
Due to the fact that Cameco Corporation (NYSE:CCJ) has experienced bearish sentiment from the aggregate hedge fund industry, it's safe to say that there is a sect of fund managers that slashed their positions entirely in the third quarter. Interestingly, Noam Gottesman's GLG Partners cut the largest position of the 750 funds tracked by Insider Monkey, totaling about $2.7 million in stock, and Lee Ainslie's Maverick Capital was right behind this move, as the fund cut about $0.4 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 2 funds in the third quarter.
Let's check out hedge fund activity in other stocks similar to Cameco Corporation (NYSE:CCJ). We will take a look at Janus Henderson Group plc (NYSE:JHG), TriNet Group Inc (NYSE:TNET), Legend Biotech Corporation (NASDAQ:LEGN), Allakos Inc. (NASDAQ:ALLK), Integra Lifesciences Holdings Corp (NASDAQ:IART), Allison Transmission Holdings Inc (NYSE:ALSN), and Wright Medical Group N.V. (NASDAQ:WMGI). All of these stocks' market caps are closest to CCJ's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position JHG,21,549840,-9 TNET,26,335733,5 LEGN,13,371533,-15 ALLK,9,305898,-5 IART,16,91422,-7 ALSN,30,584604,-2 WMGI,40,1066141,2 Average,22.1,472167,-4.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.1 hedge funds with bullish positions and the average amount invested in these stocks was $472 million. That figure was $276 million in CCJ's case. Wright Medical Group N.V. (NASDAQ:WMGI) is the most popular stock in this table. On the other hand Allakos Inc. (NASDAQ:ALLK) is the least popular one with only 9 bullish hedge fund positions. Cameco Corporation (NYSE:CCJ) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CCJ is 42.2. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. A small number of hedge funds were also right about betting on CCJ as the stock returned 32.3% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
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