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After several tireless days we have finished crunching the numbers from nearly 817 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Chatham Lodging Trust (NYSE:CLDT).
Is CLDT a good stock to buy now? Investors who are in the know were selling. The number of long hedge fund positions were cut by 2 in recent months. Chatham Lodging Trust (NYSE:CLDT) was in 12 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistics is 16. Our calculations also showed that CLDT 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.
If you'd ask most stock holders, hedge funds are perceived as underperforming, outdated investment tools of years past. While there are more than 8000 funds in operation at the moment, Our experts hone in on the elite of this club, approximately 850 funds. These investment experts direct the lion's share of the hedge fund industry's total capital, and by observing their unrivaled equity investments, Insider Monkey has found several investment strategies that have historically outpaced Mr. Market. Insider Monkey's flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points annually 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 .
Arnaud Ajdler of Engine 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 we're going to check out the latest hedge fund action encompassing Chatham Lodging Trust (NYSE:CLDT).
Do Hedge Funds Think CLDT Is A Good Stock To Buy Now?
At Q3's end, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -14% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in CLDT over the last 21 quarters. With hedgies' capital changing hands, there exists a select group of key hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
The largest stake in Chatham Lodging Trust (NYSE:CLDT) was held by Renaissance Technologies, which reported holding $13.3 million worth of stock at the end of September. It was followed by Forward Management with a $6.1 million position. Other investors bullish on the company included Gratia Capital, D E Shaw, and Engine Capital. In terms of the portfolio weights assigned to each position Gratia Capital allocated the biggest weight to Chatham Lodging Trust (NYSE:CLDT), around 13.79% of its 13F portfolio. Forward Management is also relatively very bullish on the stock, dishing out 1.02 percent of its 13F equity portfolio to CLDT.
Due to the fact that Chatham Lodging Trust (NYSE:CLDT) has experienced declining sentiment from the aggregate hedge fund industry, it's safe to say that there exists a select few funds who were dropping their full holdings last quarter. At the top of the heap, Dmitry Balyasny's Balyasny Asset Management sold off the largest investment of the "upper crust" of funds tracked by Insider Monkey, worth close to $4.9 million in stock. Michael Gelband's fund, ExodusPoint Capital, also sold off its stock, about $1 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 2 funds last quarter.
Let's now take a look at hedge fund activity in other stocks similar to Chatham Lodging Trust (NYSE:CLDT). We will take a look at Village Super Market, Inc. (NASDAQ:VLGEA), Corporacion America Airports SA (NYSE:CAAP), Cellular Biomedicine Group, Inc. (NASDAQ:CBMG), Superior Group of Companies, Inc. (NASDAQ:SGC), Fortress Biotech Inc (NASDAQ:FBIO), Bluegreen Vacations Corporation (NYSE:BXG), and Cardiff Oncology, Inc. (NASDAQ:CRDF). All of these stocks' market caps are closest to CLDT's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position VLGEA,10,28608,2 CAAP,4,4063,-3 CBMG,7,18005,3 SGC,6,9509,2 FBIO,8,48680,2 BXG,5,1706,-3 CRDF,17,113568,10 Average,8.1,32020,1.9 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.1 hedge funds with bullish positions and the average amount invested in these stocks was $32 million. That figure was $29 million in CLDT's case. Cardiff Oncology, Inc. (NASDAQ:CRDF) is the most popular stock in this table. On the other hand Corporacion America Airports SA (NYSE:CAAP) is the least popular one with only 4 bullish hedge fund positions. Chatham Lodging Trust (NYSE:CLDT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CLDT is 56.3. 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. Hedge funds were also right about betting on CLDT as the stock returned 55.2% since the end of Q3 (through 12/8) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.