In this article we will take a look at whether hedge funds think CIM Commercial Trust Corporation (NASDAQ:CMCT) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
CIM Commercial Trust Corporation (NASDAQ:CMCT) has seen a decrease in hedge fund sentiment lately. Our calculations also showed that CMCT isn't among the 30 most popular stocks among hedge funds (click for Q1 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.
In today’s marketplace there are numerous formulas investors put to use to appraise their stock investments. A pair of the most underrated formulas are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the top picks of the top hedge fund managers can outpace the S&P 500 by a very impressive amount (see the details here).
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let's check out the new hedge fund action regarding CIM Commercial Trust Corporation (NASDAQ:CMCT).
What does smart money think about CIM Commercial Trust Corporation (NASDAQ:CMCT)?
At the end of the first quarter, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -29% from one quarter earlier. On the other hand, there were a total of 1 hedge funds with a bullish position in CMCT a year ago. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
The largest stake in CIM Commercial Trust Corporation (NASDAQ:CMCT) was held by Engine Capital, which reported holding $9.2 million worth of stock at the end of September. It was followed by Ancora Advisors with a $1.8 million position. Other investors bullish on the company included Two Sigma Advisors, Renaissance Technologies, and Zebra Capital Management. In terms of the portfolio weights assigned to each position Engine Capital allocated the biggest weight to CIM Commercial Trust Corporation (NASDAQ:CMCT), around 4.8% of its 13F portfolio. Zebra Capital Management is also relatively very bullish on the stock, designating 0.19 percent of its 13F equity portfolio to CMCT.
Seeing as CIM Commercial Trust Corporation (NASDAQ:CMCT) has experienced bearish sentiment from the aggregate hedge fund industry, logic holds that there exists a select few hedgies who were dropping their positions entirely heading into Q4. Intriguingly, Roy Vermus and Shlomi Bracha's Noked Capital dropped the largest investment of the "upper crust" of funds tracked by Insider Monkey, comprising an estimated $1.7 million in stock. Bradley Louis Radoff's fund, Fondren Management, also said goodbye to its stock, about $1.5 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 2 funds heading into Q4.
Let's also examine hedge fund activity in other stocks similar to CIM Commercial Trust Corporation (NASDAQ:CMCT). We will take a look at Nesco Holdings, Inc. (NYSE:NSCO), Village Farms International, Inc. (NASDAQ:VFF), Covenant Transportation Group, Inc. (NASDAQ:CVTI), and Parke Bancorp, Inc. (NASDAQ:PKBK). This group of stocks' market values are closest to CMCT's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NSCO,10,12422,0 VFF,3,2006,-2 CVTI,9,7495,0 PKBK,4,9977,1 Average,6.5,7975,-0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.5 hedge funds with bullish positions and the average amount invested in these stocks was $8 million. That figure was $12 million in CMCT's case. Nesco Holdings, Inc. (NYSE:NSCO) is the most popular stock in this table. On the other hand Village Farms International, Inc. (NASDAQ:VFF) is the least popular one with only 3 bullish hedge fund positions. CIM Commercial Trust Corporation (NASDAQ:CMCT) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May and surpassed the market by 13.2 percentage points. Unfortunately CMCT wasn't nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); CMCT investors were disappointed as the stock returned -10.7% during the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.