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. We have processed the filings of the more than 887 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their December 31st holdings, data that is available nowhere else. Should you consider Cowen Inc. (NASDAQ:COWN) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
Is COWN stock a buy? Investors who are in the know were buying. The number of long hedge fund bets went up by 4 recently. Cowen Inc. (NASDAQ:COWN) was in 25 hedge funds' portfolios at the end of December. The all time high for this statistic is 21. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that COWN isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings). There were 21 hedge funds in our database with COWN holdings at the end of September.
Richard S. Pzena of Pzena Investment Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, auto parts business is a recession resistant business, so we are taking a closer look at this discount auto parts stock that is growing at a 196% annualized rate. We go through lists like the 15 best micro-cap stocks to buy now to identify the next stock with 10x upside potential. 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. Keeping this in mind let's take a glance at the recent hedge fund action encompassing Cowen Inc. (NASDAQ:COWN).
Do Hedge Funds Think COWN Is A Good Stock To Buy Now?
Heading into the first quarter of 2021, a total of 25 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 19% from one quarter earlier. On the other hand, there were a total of 18 hedge funds with a bullish position in COWN a year ago. With hedgies' sentiment swirling, there exists an "upper tier" of notable hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
According to Insider Monkey's hedge fund database, Arbiter Partners Capital Management, managed by Paul J. Isaac, holds the most valuable position in Cowen Inc. (NASDAQ:COWN). Arbiter Partners Capital Management has a $37.9 million position in the stock, comprising 4.6% of its 13F portfolio. The second largest stake is held by D. E. Shaw of D E Shaw, with a $24.7 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other members of the smart money that are bullish comprise Matthew Hulsizer's PEAK6 Capital Management, Richard S. Pzena's Pzena Investment Management and Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital. In terms of the portfolio weights assigned to each position Arbiter Partners Capital Management allocated the biggest weight to Cowen Inc. (NASDAQ:COWN), around 4.56% of its 13F portfolio. Mendon Capital Advisors is also relatively very bullish on the stock, setting aside 1.52 percent of its 13F equity portfolio to COWN.
Now, specific money managers were leading the bulls' herd. Azora Capital, managed by Ravi Chopra, created the largest position in Cowen Inc. (NASDAQ:COWN). Azora Capital had $13.7 million invested in the company at the end of the quarter. Richard Driehaus's Driehaus Capital also made a $12 million investment in the stock during the quarter. The following funds were also among the new COWN investors: Dmitry Balyasny's Balyasny Asset Management, Greg Eisner's Engineers Gate Manager, and Allon Hellmann's Full18 Capital.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Cowen Inc. (NASDAQ:COWN) but similarly valued. These stocks are Triumph Group Inc (NYSE:TGI), Eros STX Global Corporation (NYSE:ESGC), Vapotherm, Inc. (NYSE:VAPO), Watford Holdings Ltd. (NASDAQ:WTRE), Bright Scholar Education Holdings Limited (NYSE:BEDU), G1 Therapeutics, Inc. (NASDAQ:GTHX), and Akouos, Inc. (NASDAQ:AKUS). This group of stocks' market valuations resemble COWN's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TGI,18,85567,5 ESGC,7,12800,2 VAPO,15,154278,-3 WTRE,15,136262,4 BEDU,6,66383,-1 GTHX,16,37120,3 AKUS,11,150888,-1 Average,12.6,91900,1.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.6 hedge funds with bullish positions and the average amount invested in these stocks was $92 million. That figure was $199 million in COWN's case. Triumph Group Inc (NYSE:TGI) is the most popular stock in this table. On the other hand Bright Scholar Education Holdings Limited (NYSE:BEDU) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Cowen Inc. (NASDAQ:COWN) is more popular among hedge funds. Our overall hedge fund sentiment score for COWN is 89. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks returned 12.3% in 2021 through April 19th but still managed to beat the market by 0.9 percentage points. Hedge funds were also right about betting on COWN as the stock returned 52% since the end of December (through 4/19) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.