Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of CNB Financial Corporation Inc (NASDAQ:CCNE).
CNB Financial Corporation Inc (NASDAQ:CCNE) shares haven't seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 6 hedge funds' portfolios at the end of March. The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as Carriage Services, Inc. (NYSE:CSV), Harpoon Therapeutics, Inc. (NASDAQ:HARP), and Telaria, Inc. (NYSE:TLRA) to gather more data points. Our calculations also showed that CCNE 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.
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 58 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 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_728717" align="aligncenter" width="400"] Roger Ibbotson of Zebra Capital Management[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. 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 we're going to take a gander at the fresh hedge fund action regarding CNB Financial Corporation Inc (NASDAQ:CCNE).
What does smart money think about CNB Financial Corporation Inc (NASDAQ:CCNE)?
At Q1's end, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CCNE over the last 18 quarters. With hedgies' capital changing hands, there exists a few noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
Among these funds, Royce & Associates held the most valuable stake in CNB Financial Corporation Inc (NASDAQ:CCNE), which was worth $12.4 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $6.3 million worth of shares. Millennium Management, Citadel Investment Group, and Two Sigma Advisors 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 Royce & Associates allocated the biggest weight to CNB Financial Corporation Inc (NASDAQ:CCNE), around 0.17% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, earmarking 0.01 percent of its 13F equity portfolio to CCNE.
Judging by the fact that CNB Financial Corporation Inc (NASDAQ:CCNE) has faced a decline in interest from the aggregate hedge fund industry, it's safe to say that there is a sect of money managers that slashed their positions entirely by the end of the first quarter. Interestingly, Roger Ibbotson's Zebra Capital Management dumped the largest investment of the 750 funds watched by Insider Monkey, comprising about $0.2 million in stock, and Peter Muller's PDT Partners was right behind this move, as the fund said goodbye to about $0.2 million worth. These transactions are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as CNB Financial Corporation Inc (NASDAQ:CCNE) but similarly valued. We will take a look at Carriage Services, Inc. (NYSE:CSV), Harpoon Therapeutics, Inc. (NASDAQ:HARP), Telaria, Inc. (NYSE:TLRA), and Avid Bioservices, Inc. (NASDAQ:CDMO). This group of stocks' market valuations resemble CCNE's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CSV,11,38774,-1 HARP,11,52011,3 TLRA,15,50300,0 CDMO,11,46320,-6 Average,12,46851,-1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $47 million. That figure was $20 million in CCNE's case. Telaria, Inc. (NYSE:TLRA) is the most popular stock in this table. On the other hand Carriage Services, Inc. (NYSE:CSV) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks CNB Financial Corporation Inc (NASDAQ:CCNE) is even less popular than CSV. Hedge funds dodged a bullet by taking a bearish stance towards CCNE. 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 13.9% in 2020 through June 10th but managed to beat the market by 14.2 percentage points. Unfortunately CCNE wasn't nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); CCNE investors were disappointed as the stock returned -2.7% during the second quarter (through June 10th) 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.