The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing more than 750 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of September 30th, 2019. What do these smart investors think about Codorus Valley Bancorp, Inc. (NASDAQ:CVLY)?
Codorus Valley Bancorp, Inc. (NASDAQ:CVLY) shares haven't seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 5 hedge funds' portfolios at the end of September. At the end of this article we will also compare CVLY to other stocks including Ooma Inc (NYSE:OOMA), GigCapital2, Inc. (NYSE:GIX), and Hurco Companies, Inc. (NASDAQ:HURC) to get a better sense of its popularity. Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.8% through November 21, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_735636" align="aligncenter" width="473"] Matthew Lindenbaum of Basswood Capital[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. 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 even check out this option genius' weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager's investor letter and the stock already gained 20 percent. With all of this in mind we're going to check out the fresh hedge fund action regarding Codorus Valley Bancorp, Inc. (NASDAQ:CVLY).
How are hedge funds trading Codorus Valley Bancorp, Inc. (NASDAQ:CVLY)?
At Q3's end, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 4 hedge funds with a bullish position in CVLY a year ago. 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 Codorus Valley Bancorp, Inc. (NASDAQ:CVLY) was held by Endicott Management, which reported holding $6 million worth of stock at the end of September. It was followed by Basswood Capital with a $4.4 million position. Other investors bullish on the company included Renaissance Technologies, Royce & Associates, and Millennium Management. In terms of the portfolio weights assigned to each position Endicott Management allocated the biggest weight to Codorus Valley Bancorp, Inc. (NASDAQ:CVLY), around 5.34% of its 13F portfolio. Basswood Capital is also relatively very bullish on the stock, setting aside 0.32 percent of its 13F equity portfolio to CVLY.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren't any hedge funds dumping their holdings during the third quarter, there weren't any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven't identified any viable catalysts that can attract investor attention.
Let's go over hedge fund activity in other stocks similar to Codorus Valley Bancorp, Inc. (NASDAQ:CVLY). We will take a look at Ooma Inc (NYSE:OOMA), GigCapital2, Inc. (NYSE:GIX), Hurco Companies, Inc. (NASDAQ:HURC), and Citi Trends, Inc. (NASDAQ:CTRN). This group of stocks' market valuations match CVLY's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position OOMA,14,55956,-1 GIX,8,19892,-2 HURC,6,36498,-1 CTRN,12,30259,-1 Average,10,35651,-1.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $36 million. That figure was $17 million in CVLY's case. Ooma Inc (NYSE:OOMA) is the most popular stock in this table. On the other hand Hurco Companies, Inc. (NASDAQ:HURC) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Codorus Valley Bancorp, Inc. (NASDAQ:CVLY) is even less popular than HURC. Hedge funds dodged a bullet by taking a bearish stance towards CVLY. Our calculations showed that the top 20 most popular hedge fund stocks returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately CVLY wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); CVLY investors were disappointed as the stock returned -2.2% during the fourth quarter (through the end of November) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market so far in Q4.
Disclosure: None. This article was originally published at Insider Monkey.