At Insider Monkey, we pore over the filings of nearly 750 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we've gathered as a result gives us access to a wealth of collective knowledge based on these firms' portfolio holdings as of June 28. In this article, we will use that wealth of knowledge to determine whether or not Cogent Communications Holdings, Inc. (NASDAQ:CCOI) makes for a good investment right now.
Is Cogent Communications Holdings, Inc. (NASDAQ:CCOI) a buy here? The best stock pickers are in a pessimistic mood. The number of long hedge fund bets fell by 1 recently. Our calculations also showed that CCOI isn't among the 30 most popular stocks among hedge funds (view the video below). CCOI was in 18 hedge funds' portfolios at the end of the second quarter of 2019. There were 19 hedge funds in our database with CCOI positions at the end of the previous quarter. Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most shareholders, hedge funds are viewed as worthless, old financial tools of years past. While there are more than 8000 funds trading today, Our researchers hone in on the aristocrats of this group, around 750 funds. These money managers shepherd the majority of all hedge funds' total asset base, and by keeping track of their finest equity investments, Insider Monkey has revealed numerous investment strategies that have historically beaten the market. Insider Monkey's flagship hedge fund strategy beat the S&P 500 index by around 5 percentage points annually since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We're going to analyze the fresh hedge fund action regarding Cogent Communications Holdings, Inc. (NASDAQ:CCOI).
What have hedge funds been doing with Cogent Communications Holdings, Inc. (NASDAQ:CCOI)?
Heading into the third quarter of 2019, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a change of -5% from the first quarter of 2019. By comparison, 12 hedge funds held shares or bullish call options in CCOI a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Cogent Communications Holdings, Inc. (NASDAQ:CCOI), with a stake worth $203.2 million reported as of the end of March. Trailing Renaissance Technologies was GLG Partners, which amassed a stake valued at $34 million. Winton Capital Management, Millennium Management, and Skylands Capital were also very fond of the stock, giving the stock large weights in their portfolios.
Due to the fact that Cogent Communications Holdings, Inc. (NASDAQ:CCOI) has experienced a decline in interest from the aggregate hedge fund industry, we can see that there exists a select few money managers that slashed their positions entirely last quarter. It's worth mentioning that Genevieve Kahr's Ailanthus Capital Management dropped the largest position of the "upper crust" of funds monitored by Insider Monkey, valued at about $5.4 million in stock. Paul Tudor Jones's fund, Tudor Investment Corp, also dumped its stock, about $0.5 million worth. These transactions are important to note, as total hedge fund interest was cut by 1 funds last quarter.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Cogent Communications Holdings, Inc. (NASDAQ:CCOI) but similarly valued. These stocks are Murphy USA Inc. (NYSE:MUSA), Energizer Holdings, Inc. (NYSE:ENR), Colliers International Group Inc (NASDAQ:CIGI), and Immunomedics, Inc. (NASDAQ:IMMU). All of these stocks' market caps are similar to CCOI's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MUSA,19,206965,-2 ENR,17,230380,-7 CIGI,10,714758,-4 IMMU,21,618087,-3 Average,16.75,442548,-4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.75 hedge funds with bullish positions and the average amount invested in these stocks was $443 million. That figure was $286 million in CCOI's case. Immunomedics, Inc. (NASDAQ:IMMU) is the most popular stock in this table. On the other hand Colliers International Group Inc (NASDAQ:CIGI) is the least popular one with only 10 bullish hedge fund positions. Cogent Communications Holdings, Inc. (NASDAQ:CCOI) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately CCOI wasn't nearly as popular as these 20 stocks and hedge funds that were betting on CCOI were disappointed as the stock returned -6.2% during the third 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 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.