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Hedge Funds Are Betting On Sterling Check Corp. (STER)

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The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of September 30th. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Sterling Check Corp. (NASDAQ:STER).

Is Sterling Check Corp. (NASDAQ:STER) a cheap investment now? Hedge funds were taking a bullish view. The number of bullish hedge fund bets improved by 22 recently. Sterling Check Corp. (NASDAQ:STER) was in 22 hedge funds' portfolios at the end of September. Our calculations also showed that STER isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. With all of this in mind let's check out the key hedge fund action regarding Sterling Check Corp. (NASDAQ:STER).

Stuart Zimmer Zimmer Partners
Stuart Zimmer Zimmer Partners

Stuart Zimmer of Zimmer Partners

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

Heading into the fourth quarter of 2021, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 22 from the previous quarter. By comparison, 0 hedge funds held shares or bullish call options in STER a year ago. So, let's find out 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, Schonfeld Strategic Advisors, managed by Ryan Tolkin (CIO), holds the most valuable position in Sterling Check Corp. (NASDAQ:STER) . Schonfeld Strategic Advisors has a $21.4 million position in the stock, comprising 0.2% of its 13F portfolio. Coming in second is Ira Unschuld of Brant Point Investment Management, with a $10.2 million position; 0.9% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors that hold long positions consist of Ken Griffin's Citadel Investment Group, Stuart J. Zimmer's Zimmer Partners and Gregg Moskowitz's Interval Partners. In terms of the portfolio weights assigned to each position Brant Point Investment Management allocated the biggest weight to Sterling Check Corp. (NASDAQ:STER) , around 0.88% of its 13F portfolio. Pinz Capital is also relatively very bullish on the stock, setting aside 0.71 percent of its 13F equity portfolio to STER.

Consequently, key money managers were breaking ground themselves. Schonfeld Strategic Advisors, managed by Ryan Tolkin (CIO), initiated the most valuable position in Sterling Check Corp. (NASDAQ:STER) . Schonfeld Strategic Advisors had $21.4 million invested in the company at the end of the quarter. Ira Unschuld's Brant Point Investment Management also initiated a $10.2 million position during the quarter. The other funds with new positions in the stock are Ken Griffin's Citadel Investment Group, Stuart J. Zimmer's Zimmer Partners, and Gregg Moskowitz's Interval Partners.

Let's check out hedge fund activity in other stocks similar to Sterling Check Corp. (NASDAQ:STER) . We will take a look at WSFS Financial Corporation (NASDAQ:WSFS), Enviva Inc. (NYSE:EVA), Winnebago Industries, Inc. (NYSE:WGO), Corsair Gaming, Inc. (NASDAQ:CRSR), Arcosa, Inc. (NYSE:ACA), SPX Corporation (NYSE:SPXC), and Rambus Inc. (NASDAQ:RMBS). This group of stocks' market values match STER's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position WSFS,10,79352,-1 EVA,8,341707,-1 WGO,24,357955,0 CRSR,13,42781,-1 ACA,15,154626,3 SPXC,13,38841,2 RMBS,21,322009,1 Average,14.9,191039,0.4 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 14.9 hedge funds with bullish positions and the average amount invested in these stocks was $191 million. That figure was $84 million in STER's case. Winnebago Industries, Inc. (NYSE:WGO) is the most popular stock in this table. On the other hand Enviva Inc. (NYSE:EVA) is the least popular one with only 8 bullish hedge fund positions. Sterling Check Corp. (NASDAQ:STER) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for STER is 80. 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 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 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately STER wasn't nearly as popular as these 5 stocks and hedge funds that were betting on STER were disappointed as the stock returned -21% since the end of September (through 12/31) 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 many of these stocks already outperformed the market since 2019.

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