It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. Since stock returns aren't usually symmetrically distributed and index returns are more affected by a few outlier stocks (i.e. the FAANG stocks dominating and driving S&P 500 Index's returns in recent years), more than 50% of the constituents of the Standard and Poor’s 500 Index underperform the benchmark. Hence, if you randomly pick a stock, there is more than 50% chance that you'd fail to beat the market. At the same time, the 20 most favored S&P 500 stocks by the hedge funds monitored by Insider Monkey generated an outperformance of more than 8 percentage points so far in 2019. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That's why we are going to go over recent hedge fund activity in Chase Corporation (NYSE:CCF).
Chase Corporation (NYSE:CCF) has seen a decrease in enthusiasm from smart money recently. CCF was in 7 hedge funds' portfolios at the end of the third quarter of 2019. There were 8 hedge funds in our database with CCF positions at the end of the previous quarter. Our calculations also showed that CCF isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
If you'd ask most stock holders, hedge funds are viewed as underperforming, outdated financial tools of the past. While there are more than 8000 funds with their doors open at present, We hone in on the masters of this group, around 750 funds. These hedge fund managers preside over most of all hedge funds' total capital, and by following their inimitable equity investments, Insider Monkey has formulated several investment strategies that have historically exceeded Mr. Market. Insider Monkey's flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points a year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
[caption id="attachment_26073" align="alignnone" width="600"] Jim Simons of Renaissance Technologies[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world's largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds' buy/sell signals. We're going to take a gander at the new hedge fund action surrounding Chase Corporation (NYSE:CCF).
Hedge fund activity in Chase Corporation (NYSE:CCF)
At Q3's end, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -13% from the previous quarter. By comparison, 6 hedge funds held shares or bullish call options in CCF a year ago. With hedge funds' positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies has the most valuable position in Chase Corporation (NYSE:CCF), worth close to $42.5 million, amounting to less than 0.1%% of its total 13F portfolio. The second most bullish fund manager is Royce & Associates, managed by Chuck Royce, which holds a $19.2 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining peers that hold long positions contain David P. Cohen's Minerva Advisors, David Harding's Winton Capital Management and Ken Griffin's Citadel Investment Group. In terms of the portfolio weights assigned to each position Minerva Advisors allocated the biggest weight to Chase Corporation (NYSE:CCF), around 10.3% of its 13F portfolio. Zebra Capital Management is also relatively very bullish on the stock, earmarking 0.54 percent of its 13F equity portfolio to CCF.
Because Chase Corporation (NYSE:CCF) has faced falling interest from hedge fund managers, it's easy to see that there lies a certain "tier" of fund managers that slashed their positions entirely by the end of the third quarter. At the top of the heap, Parsa Kiai's Steamboat Capital Partners dumped the biggest stake of the "upper crust" of funds tracked by Insider Monkey, valued at close to $0.9 million in stock, and Israel Englander's Millennium Management was right behind this move, as the fund dropped about $0.3 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 1 funds by the end of the third quarter.
Let's now take a look at hedge fund activity in other stocks similar to Chase Corporation (NYSE:CCF). We will take a look at The St. Joe Company (NYSE:JOE), Encore Capital Group, Inc. (NASDAQ:ECPG), Apogee Enterprises, Inc. (NASDAQ:APOG), and ePlus Inc. (NASDAQ:PLUS). This group of stocks' market caps match CCF's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position JOE,9,503471,-3 ECPG,10,65147,2 APOG,12,130115,0 PLUS,12,43114,0 Average,10.75,185462,-0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.75 hedge funds with bullish positions and the average amount invested in these stocks was $185 million. That figure was $87 million in CCF's case. Apogee Enterprises, Inc. (NASDAQ:APOG) is the most popular stock in this table. On the other hand The St. Joe Company (NYSE:JOE) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Chase Corporation (NYSE:CCF) is even less popular than JOE. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on CCF, though not to the same extent, as the stock returned 8.3% during the fourth quarter (through 11/30) and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.