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Is CW Stock A Buy or Sell?

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  • CW

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. Insider Monkey finished processing 887 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of December 31st, 2020. What do these smart investors think about Curtiss-Wright Corp. (NYSE:CW)?

Is CW stock a buy? Money managers were becoming less hopeful. The number of long hedge fund positions decreased by 3 recently. Curtiss-Wright Corp. (NYSE:CW) was in 23 hedge funds' portfolios at the end of December. The all time high for this statistic is 26. Our calculations also showed that CW isn't among the 30 most popular stocks among hedge funds (click for Q4 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 124 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.


Paul Tudor Jones of Tudor Investment Corp

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. Now we're going to analyze the key hedge fund action regarding Curtiss-Wright Corp. (NYSE:CW).

Do Hedge Funds Think CW Is A Good Stock To Buy Now?

At the end of December, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -12% from the previous quarter. On the other hand, there were a total of 22 hedge funds with a bullish position in CW a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Millennium Management held the most valuable stake in Curtiss-Wright Corp. (NYSE:CW), which was worth $66.7 million at the end of the fourth quarter. On the second spot was GAMCO Investors which amassed $36.9 million worth of shares. Adage Capital Management, D E Shaw, and AQR 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 Running Oak Capital allocated the biggest weight to Curtiss-Wright Corp. (NYSE:CW), around 1.74% of its 13F portfolio. Prospector Partners is also relatively very bullish on the stock, dishing out 1.08 percent of its 13F equity portfolio to CW.

Seeing as Curtiss-Wright Corp. (NYSE:CW) has experienced a decline in interest from the aggregate hedge fund industry, logic holds that there lies a certain "tier" of hedgies that decided to sell off their full holdings last quarter. Interestingly, Louis Bacon's Moore Global Investments sold off the largest stake of the "upper crust" of funds monitored by Insider Monkey, worth close to $6.6 million in stock. Paul Marshall and Ian Wace's fund, Marshall Wace LLP, also sold off its stock, about $3.9 million worth. These transactions are important to note, as total hedge fund interest fell by 3 funds last quarter.

Let's also examine hedge fund activity in other stocks similar to Curtiss-Wright Corp. (NYSE:CW). These stocks are TFI International Inc. (NYSE:TFII), BOK Financial Corporation (NASDAQ:BOKF), Nexstar Media Group, Inc. (NASDAQ:NXST), Ashland Global Holdings Inc.. (NYSE:ASH), Flowserve Corporation (NYSE:FLS), Flowers Foods, Inc. (NYSE:FLO), and Boyd Gaming Corporation (NYSE:BYD). This group of stocks' market caps are closest to CW's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TFII,10,78114,-3 BOKF,26,361027,5 NXST,44,891159,3 ASH,38,1114289,-8 FLS,21,148236,2 FLO,27,289063,-3 BYD,28,275982,0 Average,27.7,451124,-0.6 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 27.7 hedge funds with bullish positions and the average amount invested in these stocks was $451 million. That figure was $245 million in CW's case. Nexstar Media Group, Inc. (NASDAQ:NXST) is the most popular stock in this table. On the other hand TFI International Inc. (NYSE:TFII) is the least popular one with only 10 bullish hedge fund positions. Curtiss-Wright Corp. (NYSE:CW) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CW is 47.7. 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 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 gained 12.3% in 2021 through April 19th and surpassed the market again by 0.9 percentage points. Unfortunately CW wasn't nearly as popular as these 30 stocks (hedge fund sentiment was quite bearish); CW investors were disappointed as the stock returned 7.9% since the end of December (through 4/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.

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Disclosure: None. This article was originally published at Insider Monkey.

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