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 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards CSG Systems International, Inc. (NASDAQ:CSGS).
Is CSG Systems International, Inc. (NASDAQ:CSGS) going to take off soon? The best stock pickers are getting less optimistic. The number of bullish hedge fund positions were cut by 4 recently. Our calculations also showed that CSGS 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). CSGS was in 19 hedge funds' portfolios at the end of March. There were 23 hedge funds in our database with CSGS holdings at the end of the previous quarter. Video: Watch our video about the top 5 most popular hedge fund stocks.
According to most shareholders, hedge funds are assumed to be underperforming, outdated investment vehicles of the past. While there are more than 8000 funds trading at present, We hone in on the upper echelon of this club, around 850 funds. These hedge fund managers preside over most of the hedge fund industry's total capital, and by tailing their top investments, Insider Monkey has unsheathed a few investment strategies that have historically outpaced the S&P 500 index. Insider Monkey's flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
[caption id="attachment_746830" align="aligncenter" width="397"] Matthew Hulsizer of PEAK6 Capital[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let's check out the key hedge fund action regarding CSG Systems International, Inc. (NASDAQ:CSGS).
How have hedgies been trading CSG Systems International, Inc. (NASDAQ:CSGS)?
At the end of the first quarter, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of -17% from the fourth quarter of 2019. By comparison, 17 hedge funds held shares or bullish call options in CSGS a year ago. With the smart money's sentiment swirling, there exists a few notable hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
The largest stake in CSG Systems International, Inc. (NASDAQ:CSGS) was held by Renaissance Technologies, which reported holding $93.9 million worth of stock at the end of September. It was followed by Polar Capital with a $31.1 million position. Other investors bullish on the company included Value Holdings LP, Arrowstreet Capital, and GLG Partners. In terms of the portfolio weights assigned to each position Value Holdings LP allocated the biggest weight to CSG Systems International, Inc. (NASDAQ:CSGS), around 6.54% of its 13F portfolio. Zebra Capital Management is also relatively very bullish on the stock, setting aside 0.97 percent of its 13F equity portfolio to CSGS.
Judging by the fact that CSG Systems International, Inc. (NASDAQ:CSGS) has experienced falling interest from the smart money, logic holds that there was a specific group of fund managers that elected to cut their positions entirely in the first quarter. It's worth mentioning that Dmitry Balyasny's Balyasny Asset Management cut the largest investment of the "upper crust" of funds followed by Insider Monkey, valued at an estimated $1.5 million in stock. Minhua Zhang's fund, Weld Capital Management, also said goodbye to its stock, about $1.2 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 4 funds in the first quarter.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as CSG Systems International, Inc. (NASDAQ:CSGS) but similarly valued. These stocks are InterDigital, Inc. (NASDAQ:IDCC), The Goodyear Tire & Rubber Company (NASDAQ:GT), Embraer SA (NYSE:ERJ), and Itau CorpBanca (NYSE:ITCB). This group of stocks' market caps are closest to CSGS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position IDCC,23,289642,-4 GT,26,129699,-6 ERJ,16,188996,2 ITCB,1,1270,0 Average,16.5,152402,-2 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.5 hedge funds with bullish positions and the average amount invested in these stocks was $152 million. That figure was $170 million in CSGS's case. The Goodyear Tire & Rubber Company (NASDAQ:GT) is the most popular stock in this table. On the other hand Itau CorpBanca (NYSE:ITCB) is the least popular one with only 1 bullish hedge fund positions. CSG Systems International, Inc. (NASDAQ:CSGS) is not the most popular stock in this group but hedge fund interest is still above average. 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.4% in 2020 through June 22nd but beat the market by 15.9 percentage points. Unfortunately CSGS wasn't nearly as popular as these 10 stocks and hedge funds that were betting on CSGS were disappointed as the stock returned 4.7% during the same time period 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 many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.