How do we determine whether Collier Creek Holdings (NYSE:CCH) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
Is Collier Creek Holdings (NYSE:CCH) a bargain? The smart money is getting more bullish. The number of bullish hedge fund positions moved up by 2 lately. Our calculations also showed that CCH isn't among the 30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We're going to go over the recent hedge fund action encompassing Collier Creek Holdings (NYSE:CCH).
What have hedge funds been doing with Collier Creek Holdings (NYSE:CCH)?
At Q1's end, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 13% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CCH over the last 15 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Steadfast Capital Management was the largest shareholder of Collier Creek Holdings (NYSE:CCH), with a stake worth $20.6 million reported as of the end of March. Trailing Steadfast Capital Management was Governors Lane, which amassed a stake valued at $19.9 million. Millennium Management, Moore Global Investments, and Highbridge Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.
Now, key hedge funds were breaking ground themselves. Highbridge Capital Management, managed by Glenn Russell Dubin, established the most outsized position in Collier Creek Holdings (NYSE:CCH). Highbridge Capital Management had $12.2 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace's Marshall Wace LLP also initiated a $7.2 million position during the quarter. The other funds with brand new CCH positions are John Thiessen's Vertex One Asset Management, Israel Englander's Millennium Management, and Glenn Russell Dubin's Highbridge Capital Management.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Collier Creek Holdings (NYSE:CCH) but similarly valued. We will take a look at NuCana plc (NASDAQ:NCNA), Castlight Health Inc (NYSE:CSLT), GlycoMimetics, Inc. (NASDAQ:GLYC), and ORBCOMM Inc (NASDAQ:ORBC). All of these stocks' market caps are similar to CCH's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NCNA,1,54927,-1 CSLT,12,28557,0 GLYC,8,52173,-2 ORBC,16,95540,4 Average,9.25,57799,0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.25 hedge funds with bullish positions and the average amount invested in these stocks was $58 million. That figure was $152 million in CCH's case. ORBCOMM Inc (NASDAQ:ORBC) is the most popular stock in this table. On the other hand NuCana plc (NASDAQ:NCNA) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Collier Creek Holdings (NYSE:CCH) is more popular among hedge funds. 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. Hedge funds were also right about betting on CCH, though not to the same extent, as the stock returned 0.9% during the same period and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.