Is CPS Technologies Corp. (CPSH) A Good Stock To Buy?
In this article you are going to find out whether hedge funds think CPS Technologies Corp. (NASDAQ:CPSH) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It's not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Is CPSH a good stock to buy? CPS Technologies Corp. (NASDAQ:CPSH) was in 4 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic was previously 1. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. CPSH investors should be aware of an increase in support from the world's most elite money managers of late. There were 0 hedge funds in our database with CPSH holdings at the end of December. Our calculations also showed that CPSH isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Donald Sussman of Paloma Partners
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $28 biotech stock for $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 take a peek at the latest hedge fund action regarding CPS Technologies Corp. (NASDAQ:CPSH).
Do Hedge Funds Think CPSH Is A Good Stock To Buy Now?
At first quarter's end, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of 4 from the previous quarter. The graph below displays the number of hedge funds with bullish position in CPSH 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.
Of the funds tracked by Insider Monkey, Millennium Management, managed by Israel Englander, holds the biggest position in CPS Technologies Corp. (NASDAQ:CPSH). Millennium Management has a $3.2 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Millennium Management's heels is Renaissance Technologies, holding a $1.4 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other members of the smart money with similar optimism consist of Ken Griffin's Citadel Investment Group, Donald Sussman's Paloma Partners and . In terms of the portfolio weights assigned to each position Paloma Partners allocated the biggest weight to CPS Technologies Corp. (NASDAQ:CPSH), around 0.0029% of its 13F portfolio. Millennium Management is also relatively very bullish on the stock, setting aside 0.0023 percent of its 13F equity portfolio to CPSH.
As industrywide interest jumped, specific money managers have been driving this bullishness. Millennium Management, managed by Israel Englander, assembled the largest position in CPS Technologies Corp. (NASDAQ:CPSH). Millennium Management had $3.2 million invested in the company at the end of the quarter. Renaissance Technologies also initiated a $1.4 million position during the quarter. The following funds were also among the new CPSH investors: Ken Griffin's Citadel Investment Group and Donald Sussman's Paloma Partners.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as CPS Technologies Corp. (NASDAQ:CPSH) but similarly valued. We will take a look at Ur-Energy Inc. (NYSE:URG), ObsEva SA (NASDAQ:OBSV), Genprex, Inc. (NASDAQ:GNPX), Midwest Holding Inc. (NASDAQ:MDWT), MOGU Inc. (NYSE:MOGU), ChoiceOne Financial Services, Inc. (NASDAQ:COFS), and AG Mortgage Investment Trust Inc (NYSE:MITT). This group of stocks' market caps are similar to CPSH's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position URG,4,6017,0 OBSV,3,1554,-1 GNPX,5,2388,4 MDWT,7,23330,-2 MOGU,3,21358,-3 COFS,1,402,-1 MITT,12,28134,1 Average,5,11883,-0.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $12 million. That figure was $5 million in CPSH's case. AG Mortgage Investment Trust Inc (NYSE:MITT) is the most popular stock in this table. On the other hand ChoiceOne Financial Services, Inc. (NASDAQ:COFS) is the least popular one with only 1 bullish hedge fund positions. CPS Technologies Corp. (NASDAQ:CPSH) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CPSH is 52.6. 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 17.2% in 2021 through June 11th and surpassed the market again by 3.3 percentage points. Unfortunately CPSH wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); CPSH investors were disappointed as the stock returned -36.6% since the end of March (through 6/11) 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.
Disclosure: None. This article was originally published at Insider Monkey.
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