At Insider Monkey, we pore over the filings of nearly 817 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 September 30. In this article, we will use that wealth of knowledge to determine whether or not Catchmark Timber Trust Inc (NYSE:CTT) makes for a good investment right now.
Is CTT a good stock to buy now? Catchmark Timber Trust Inc (NYSE:CTT) investors should be aware of an increase in support from the world's most elite money managers lately. Catchmark Timber Trust Inc (NYSE:CTT) was in 13 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistic is 16. Our calculations also showed that CTT isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: 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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 percentage points since March 2017 (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 13% through November 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Joe Huber of Huber Capital Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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. Now we're going to take a look at the fresh hedge fund action regarding Catchmark Timber Trust Inc (NYSE:CTT).
Do Hedge Funds Think CTT Is A Good Stock To Buy Now?
At third quarter's end, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 44% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CTT over the last 21 quarters. 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 Catchmark Timber Trust Inc (NYSE:CTT), with a stake worth $29.8 million reported as of the end of September. Trailing Renaissance Technologies was Impax Asset Management, which amassed a stake valued at $8.4 million. Voss Capital, Royce & Associates, and Huber Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Voss Capital allocated the biggest weight to Catchmark Timber Trust Inc (NYSE:CTT), around 2.47% of its 13F portfolio. Huber Capital Management is also relatively very bullish on the stock, designating 0.98 percent of its 13F equity portfolio to CTT.
Now, key hedge funds were leading the bulls' herd. Millennium Management, managed by Israel Englander, established the largest position in Catchmark Timber Trust Inc (NYSE:CTT). Millennium Management had $0.8 million invested in the company at the end of the quarter. Murray Stahl's Horizon Asset Management also made a $0.4 million investment in the stock during the quarter. The other funds with brand new CTT positions are Paul Tudor Jones's Tudor Investment Corp and Greg Eisner's Engineers Gate Manager.
Let's go over hedge fund activity in other stocks similar to Catchmark Timber Trust Inc (NYSE:CTT). We will take a look at Aegion Corp (NASDAQ:AEGN), Mercer International Inc. (NASDAQ:MERC), Altimmune, Inc. (NASDAQ:ALT), Cambium Networks Corporation (NASDAQ:CMBM), Byline Bancorp, Inc. (NYSE:BY), McEwen Mining Inc (NYSE:MUX), and Establishment Labs Holdings Inc. (NASDAQ:ESTA). This group of stocks' market valuations are closest to CTT's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AEGN,9,13719,-1 MERC,13,82614,3 ALT,18,144736,6 CMBM,6,4612,4 BY,7,8582,-1 MUX,10,5331,1 ESTA,12,78833,1 Average,10.7,48347,1.9 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.7 hedge funds with bullish positions and the average amount invested in these stocks was $48 million. That figure was $54 million in CTT's case. Altimmune, Inc. (NASDAQ:ALT) is the most popular stock in this table. On the other hand Cambium Networks Corporation (NASDAQ:CMBM) is the least popular one with only 6 bullish hedge fund positions. Catchmark Timber Trust Inc (NYSE:CTT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CTT is 62.5. 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 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 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and beat the market again by 16.2 percentage points. Unfortunately CTT wasn't nearly as popular as these 20 stocks and hedge funds that were betting on CTT were disappointed as the stock returned 5.9% since the end of September (through 12/8) 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.
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Disclosure: None. This article was originally published at Insider Monkey.