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While the market driven by short-term sentiment influenced by the accomodative interest rate environment in the US, virus news and stimulus talks, many smart money investors are starting to get cautious towards the current bull run since March and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 30,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Columbia Financial, Inc. (NASDAQ:CLBK).
Is CLBK a good stock to buy now? Hedge funds were turning bullish. The number of long hedge fund positions inched up by 3 in recent months. Columbia Financial, Inc. (NASDAQ:CLBK) was in 13 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistic is 12. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that CLBK 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). There were 10 hedge funds in our database with CLBK positions at the end of the second quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most market participants, hedge funds are perceived as underperforming, outdated investment vehicles of the past. While there are over 8000 funds in operation today, Our experts look at the aristocrats of this group, approximately 850 funds. Most estimates calculate that this group of people orchestrate most of the hedge fund industry's total asset base, and by tailing their highest performing picks, Insider Monkey has unsheathed a few investment strategies that have historically outpaced Mr. Market. Insider Monkey's flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
Fred DiSanto of Ancora Advisors
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 we're going to take a gander at the key hedge fund action surrounding Columbia Financial, Inc. (NASDAQ:CLBK).
Do Hedge Funds Think CLBK Is A Good Stock To Buy Now?
At Q3's end, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of 30% from the second quarter of 2020. On the other hand, there were a total of 10 hedge funds with a bullish position in CLBK a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Renaissance Technologies held the most valuable stake in Columbia Financial, Inc. (NASDAQ:CLBK), which was worth $14.6 million at the end of the third quarter. On the second spot was Ancora Advisors which amassed $7 million worth of shares. Seidman Investment Partnership, Winton Capital Management, and Marshall Wace LLP were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Seidman Investment Partnership allocated the biggest weight to Columbia Financial, Inc. (NASDAQ:CLBK), around 7.86% of its 13F portfolio. Minerva Advisors is also relatively very bullish on the stock, designating 0.32 percent of its 13F equity portfolio to CLBK.
As industrywide interest jumped, key money managers have been driving this bullishness. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, established the most valuable position in Columbia Financial, Inc. (NASDAQ:CLBK). Marshall Wace LLP had $1.9 million invested in the company at the end of the quarter. Paul Tudor Jones's Tudor Investment Corp also initiated a $0.3 million position during the quarter. The other funds with new positions in the stock are D. E. Shaw's D E Shaw and Matthew Hulsizer's PEAK6 Capital Management.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Columbia Financial, Inc. (NASDAQ:CLBK) but similarly valued. These stocks are Aphria Inc. (NASDAQ:APHA), Renasant Corporation (NASDAQ:RNST), Mersana Therapeutics, Inc. (NASDAQ:MRSN), Beam Therapeutics Inc. (NASDAQ:BEAM), Adtalem Global Education Inc. (NYSE:ATGE), Black Stone Minerals LP (NYSE:BSM), and The RealReal, Inc. (NASDAQ:REAL). This group of stocks' market values are similar to CLBK's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position APHA,8,11235,-1 RNST,9,19980,-1 MRSN,28,445697,3 BEAM,7,193738,-3 ATGE,24,246607,2 BSM,4,6551,-1 REAL,26,245308,7 Average,15.1,167017,0.9 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.1 hedge funds with bullish positions and the average amount invested in these stocks was $167 million. That figure was $34 million in CLBK's case. Mersana Therapeutics, Inc. (NASDAQ:MRSN) is the most popular stock in this table. On the other hand Black Stone Minerals LP (NYSE:BSM) is the least popular one with only 4 bullish hedge fund positions. Columbia Financial, Inc. (NASDAQ:CLBK) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CLBK is 56.8. 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 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on CLBK as the stock returned 35.8% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.