Is Computer Task Group, Inc. (CTG) A Good Stock To Buy?
In this article we will check out the progression of hedge fund sentiment towards Computer Task Group, Inc. (NASDAQ:CTG) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Is CTG a good stock to buy now? Computer Task Group, Inc. (NASDAQ:CTG) has experienced an increase in activity from the world's largest hedge funds of late. Computer Task Group, Inc. (NASDAQ:CTG) was in 6 hedge funds' portfolios at the end of March. The all time high for this statistic is 11. Our calculations also showed that CTG isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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. Hedge funds have more than $3.5 trillion in assets under management, so you can't expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds' moves today.
Fred DiSanto of Ancora Advisors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $24 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. With all of this in mind we're going to check out the fresh hedge fund action regarding Computer Task Group, Inc. (NASDAQ:CTG).
Do Hedge Funds Think CTG Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards CTG over the last 23 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Computer Task Group, Inc. (NASDAQ:CTG) was held by Minerva Advisors, which reported holding $11.1 million worth of stock at the end of December. It was followed by Renaissance Technologies with a $11.1 million position. Other investors bullish on the company included Royce & Associates, Ancora Advisors, and Arrowstreet Capital. In terms of the portfolio weights assigned to each position Minerva Advisors allocated the biggest weight to Computer Task Group, Inc. (NASDAQ:CTG), around 6.09% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, setting aside 0.04 percent of its 13F equity portfolio to CTG.
As aggregate interest increased, key money managers have been driving this bullishness. Millennium Management, managed by Israel Englander, established the most outsized position in Computer Task Group, Inc. (NASDAQ:CTG). Millennium Management had $0.1 million invested in the company at the end of the quarter.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Computer Task Group, Inc. (NASDAQ:CTG) but similarly valued. We will take a look at Superior Industries International Inc. (NYSE:SUP), J Alexander's Holdings Inc (NYSE:JAX), Genocea Biosciences Inc (NASDAQ:GNCA), Asure Software Inc (NASDAQ:ASUR), BG Staffing Inc (NYSE:BGSF), Altisource Portfolio Solutions S.A. (NASDAQ:ASPS), and Protalix BioTherapeutics Inc. (NYSE:PLX). This group of stocks' market caps match CTG's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SUP,12,22250,0 JAX,10,29057,0 GNCA,11,45206,1 ASUR,11,36552,1 BGSF,7,3727,1 ASPS,3,7514,-1 PLX,6,17778,3 Average,8.6,23155,0.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.6 hedge funds with bullish positions and the average amount invested in these stocks was $23 million. That figure was $31 million in CTG's case. Superior Industries International Inc. (NYSE:SUP) is the most popular stock in this table. On the other hand Altisource Portfolio Solutions S.A. (NASDAQ:ASPS) is the least popular one with only 3 bullish hedge fund positions. Computer Task Group, Inc. (NASDAQ:CTG) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CTG is 39. 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. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 19.3% in 2021 through June 25th and surpassed the market again by 4.8 percentage points. Unfortunately CTG wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); CTG investors were disappointed as the stock returned 0.5% since the end of March (through 6/25) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.
