In this article you are going to find out whether hedge funds think CVB Financial Corp. (NASDAQ:CVBF) 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.
CVB Financial Corp. (NASDAQ:CVBF) investors should be aware of a decrease in enthusiasm from smart money recently. CVBF was in 8 hedge funds' portfolios at the end of the first quarter of 2020. There were 14 hedge funds in our database with CVBF holdings at the end of the previous quarter. Our calculations also showed that CVBF isn't among the 30 most popular stocks among hedge funds (click for Q1 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.
To the average investor there are a multitude of gauges stock traders have at their disposal to grade publicly traded companies. A duo of the best gauges are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the elite hedge fund managers can outclass the broader indices by a solid margin (see the details here).
[caption id="attachment_745225" align="aligncenter" width="392"] Noam Gottesman of GLG Partners[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let's go over the latest hedge fund action encompassing CVB Financial Corp. (NASDAQ:CVBF).
How are hedge funds trading CVB Financial Corp. (NASDAQ:CVBF)?
At the end of the first quarter, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a change of -43% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in CVBF over the last 18 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies has the biggest position in CVB Financial Corp. (NASDAQ:CVBF), worth close to $26.6 million, comprising less than 0.1%% of its total 13F portfolio. The second most bullish fund manager is Citadel Investment Group, led by Ken Griffin, holding a $5.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining professional money managers that are bullish consist of Noam Gottesman's GLG Partners, Brandon Haley's Holocene Advisors and D. E. Shaw's D E Shaw. In terms of the portfolio weights assigned to each position AlphaCrest Capital Management allocated the biggest weight to CVB Financial Corp. (NASDAQ:CVBF), around 0.04% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, designating 0.03 percent of its 13F equity portfolio to CVBF.
Due to the fact that CVB Financial Corp. (NASDAQ:CVBF) has experienced a decline in interest from hedge fund managers, logic holds that there were a few hedgies who were dropping their positions entirely last quarter. Intriguingly, Dmitry Balyasny's Balyasny Asset Management sold off the largest investment of all the hedgies monitored by Insider Monkey, comprising an estimated $0.9 million in stock, and Ryan Tolkin (CIO)'s Schonfeld Strategic Advisors was right behind this move, as the fund dumped about $0.4 million worth. These transactions are interesting, as total hedge fund interest was cut by 6 funds last quarter.
Let's now take a look at hedge fund activity in other stocks similar to CVB Financial Corp. (NASDAQ:CVBF). These stocks are Ardagh Group S.A. (NYSE:ARD), ACI Worldwide Inc (NASDAQ:ACIW), Novanta Inc. (NASDAQ:NOVT), and PTC Therapeutics, Inc. (NASDAQ:PTCT). This group of stocks' market caps match CVBF's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ARD,8,48967,-1 ACIW,24,271686,4 NOVT,10,20986,-4 PTCT,28,378361,-6 Average,17.5,180000,-1.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.5 hedge funds with bullish positions and the average amount invested in these stocks was $180 million. That figure was $40 million in CVBF's case. PTC Therapeutics, Inc. (NASDAQ:PTCT) is the most popular stock in this table. On the other hand Ardagh Group S.A. (NYSE:ARD) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks CVB Financial Corp. (NASDAQ:CVBF) is even less popular than ARD. Hedge funds dodged a bullet by taking a bearish stance towards CVBF. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.2% in 2020 through June 17th but managed to beat the market by 14.8 percentage points. Unfortunately CVBF wasn't nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); CVBF investors were disappointed as the stock returned -5.8% during the second quarter (through June 17th) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.
Disclosure: None. This article was originally published at Insider Monkey.