We are still in an overall bull market and many stocks that smart money investors were piling into surged through the end of November. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 54% and 51% respectively. Hedge funds' top 3 stock picks returned 41.7% this year and beat the S&P 500 ETFs by 14 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That's why we believe it isn't a waste of time to check out hedge fund sentiment before you invest in a stock like Civeo Corporation (Canada) (NYSE:CVEO).
Civeo Corporation (Canada) (NYSE:CVEO) shares haven't seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 13 hedge funds' portfolios at the end of September. 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 Clovis Oncology Inc (NASDAQ:CLVS), Gold Standard Ventures Corp (NYSEAMEX:GSV), and Enochian Biosciences Inc. (NASDAQ:ENOB) to gather more data points. Our calculations also showed that CVEO isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are dozens of formulas stock traders use to value stocks. A couple of the less known formulas are hedge fund and insider trading activity. We have shown that, historically, those who follow the best picks of the best hedge fund managers can outclass the broader indices by a superb amount (see the details here).
[caption id="attachment_26073" align="alignnone" width="600"] Jim Simons of Renaissance Technologies[/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. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds' buy/sell signals. Let's view the fresh hedge fund action encompassing Civeo Corporation (Canada) (NYSE:CVEO).
What does smart money think about Civeo Corporation (Canada) (NYSE:CVEO)?
Heading into the fourth quarter of 2019, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 12 hedge funds with a bullish position in CVEO a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Horizon Asset Management held the most valuable stake in Civeo Corporation (Canada) (NYSE:CVEO), which was worth $51.1 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $11 million worth of shares. Prescott Group Capital Management, Cloverdale Capital Management, and DC Capital Partners 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 DC Capital Partners allocated the biggest weight to Civeo Corporation (Canada) (NYSE:CVEO), around 3.34% of its 13F portfolio. Cloverdale Capital Management is also relatively very bullish on the stock, designating 2.6 percent of its 13F equity portfolio to CVEO.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Citadel Investment Group. One hedge fund selling its entire position doesn't always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don't think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Millennium Management).
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Civeo Corporation (Canada) (NYSE:CVEO) but similarly valued. We will take a look at Clovis Oncology Inc (NASDAQ:CLVS), Gold Standard Ventures Corp (NYSEAMEX:GSV), Enochian Biosciences Inc. (NASDAQ:ENOB), and First Internet Bancorp (NASDAQ:INBK). This group of stocks' market valuations are closest to CVEO's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CLVS,20,64849,-4 GSV,2,177,0 ENOB,2,210,1 INBK,6,2990,3 Average,7.5,17057,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.5 hedge funds with bullish positions and the average amount invested in these stocks was $17 million. That figure was $85 million in CVEO's case. Clovis Oncology Inc (NASDAQ:CLVS) is the most popular stock in this table. On the other hand Gold Standard Ventures Corp (NYSEAMEX:GSV) is the least popular one with only 2 bullish hedge fund positions. Civeo Corporation (Canada) (NYSE:CVEO) 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 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately CVEO wasn't nearly as popular as these 20 stocks and hedge funds that were betting on CVEO were disappointed as the stock returned -28.7% during the fourth quarter (through the end of November) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 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.