With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter. One of these stocks was Camtek LTD. (NASDAQ:CAMT).
Camtek LTD. (NASDAQ:CAMT) shares haven't seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 10 hedge funds' portfolios at the end of the third quarter of 2019. 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 TrueCar Inc (NASDAQ:TRUE), Yintech Investment Holdings Limited (NASDAQ:YIN), and Citizens & Northern Corporation (NASDAQ:CZNC) to gather more data points. Our calculations also showed that CAMT 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.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. 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 Russell 2000 ETFs by 40 percentage points since May 2014 (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 27.8% through November 21, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[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 take a peek at the key hedge fund action surrounding Camtek LTD. (NASDAQ:CAMT).
What have hedge funds been doing with Camtek LTD. (NASDAQ:CAMT)?
Heading into the fourth quarter of 2019, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the second quarter of 2019. The graph below displays the number of hedge funds with bullish position in CAMT over the last 17 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey's hedge fund database, Renaissance Technologies has the most valuable position in Camtek LTD. (NASDAQ:CAMT), worth close to $16.8 million, corresponding to less than 0.1%% of its total 13F portfolio. The second most bullish fund manager is Chuck Royce of Royce & Associates, with a $3.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other peers with similar optimism encompass John Overdeck and David Siegel's Two Sigma Advisors, Israel Englander's Millennium Management and David E. Shaw's D E Shaw. In terms of the portfolio weights assigned to each position Algert Coldiron Investors allocated the biggest weight to Camtek LTD. (NASDAQ:CAMT), around 0.17% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, earmarking 0.03 percent of its 13F equity portfolio to CAMT.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Manatuck Hill Partners. 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 PEAK6 Capital Management).
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Camtek LTD. (NASDAQ:CAMT) but similarly valued. We will take a look at TrueCar Inc (NASDAQ:TRUE), Yintech Investment Holdings Limited (NASDAQ:YIN), Citizens & Northern Corporation (NASDAQ:CZNC), and TCR2 Therapeutics Inc. (NASDAQ:TCRR). All of these stocks' market caps resemble CAMT's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TRUE,15,66619,0 YIN,1,362,0 CZNC,2,6741,0 TCRR,2,31761,-2 Average,5,26371,-0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $26 million. That figure was $25 million in CAMT's case. TrueCar Inc (NASDAQ:TRUE) is the most popular stock in this table. On the other hand Yintech Investment Holdings Limited (NASDAQ:YIN) is the least popular one with only 1 bullish hedge fund positions. Camtek LTD. (NASDAQ:CAMT) is not the most popular stock in this group but hedge fund interest is still above average. 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. Hedge funds were also right about betting on CAMT as the stock returned 12.5% during the fourth quarter (through the end of November) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.