A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended March 31, so let’s proceed with the discussion of the hedge fund sentiment on Chemical Financial Corporation (NASDAQ:CHFC).
Is Chemical Financial Corporation (NASDAQ:CHFC) the right investment to pursue these days? Money managers are taking a bullish view. The number of long hedge fund positions advanced by 8 in recent months. Our calculations also showed that chfc isn't among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (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 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let's analyze the recent hedge fund action surrounding Chemical Financial Corporation (NASDAQ:CHFC).
How have hedgies been trading Chemical Financial Corporation (NASDAQ:CHFC)?
At Q1's end, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a change of 80% from the fourth quarter of 2018. The graph below displays the number of hedge funds with bullish position in CHFC over the last 15 quarters. With hedge funds' capital changing hands, there exists an "upper tier" of key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
The largest stake in Chemical Financial Corporation (NASDAQ:CHFC) was held by Carlson Capital, which reported holding $16.7 million worth of stock at the end of March. It was followed by Citadel Investment Group with a $15.3 million position. Other investors bullish on the company included Alpine Associates, GLG Partners, and Marshall Wace LLP.
With a general bullishness amongst the heavyweights, key money managers have been driving this bullishness. Carlson Capital, managed by Clint Carlson, initiated the most valuable position in Chemical Financial Corporation (NASDAQ:CHFC). Carlson Capital had $16.7 million invested in the company at the end of the quarter. Robert Emil Zoellner's Alpine Associates also initiated a $15.1 million position during the quarter. The following funds were also among the new CHFC investors: Cliff Asness's AQR Capital Management, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, and Benjamin A. Smith's Laurion Capital Management.
Let's go over hedge fund activity in other stocks similar to Chemical Financial Corporation (NASDAQ:CHFC). We will take a look at UniFirst Corp (NYSE:UNF), NuVasive, Inc. (NASDAQ:NUVA), White Mountains Insurance Group Ltd (NYSE:WTM), and Rogers Corporation (NYSE:ROG). All of these stocks' market caps are closest to CHFC's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position UNF,21,163958,7 NUVA,20,248855,0 WTM,16,161311,-2 ROG,9,67070,2 Average,16.5,160299,1.75 [/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 $160 million. That figure was $96 million in CHFC's case. UniFirst Corp (NYSE:UNF) is the most popular stock in this table. On the other hand Rogers Corporation (NYSE:ROG) is the least popular one with only 9 bullish hedge fund positions. Chemical Financial Corporation (NASDAQ:CHFC) 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 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately CHFC wasn't nearly as popular as these 20 stocks and hedge funds that were betting on CHFC were disappointed as the stock returned -6.2% during the same 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 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.