The market has been volatile in the last few months as the Federal Reserve finalized its rate cuts and uncertainty looms over trade negotiations with China. Small cap stocks have been hit hard as a result, as the Russell 2000 ETF (IWM) has underperformed the larger S&P 500 ETF (SPY) by more than 10 percentage points over the last 12 months. SEC filings and hedge fund investor letters indicate that the smart money seems to be paring back their overall long exposure since summer months, though some funds increased their exposure dramatically at the end of Q3 and the beginning of Q4. In this article, we analyze what the smart money thinks of Citizens Community Bancorp Inc. (NASDAQ:CZWI) and find out how it is affected by hedge funds' moves.
Citizens Community Bancorp Inc. (NASDAQ:CZWI) has seen an increase in enthusiasm from smart money lately. Our calculations also showed that CZWI 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In the eyes of most traders, hedge funds are assumed to be worthless, outdated investment tools of years past. While there are more than 8000 funds trading today, We hone in on the leaders of this group, around 750 funds. Most estimates calculate that this group of people have their hands on bulk of the smart money's total capital, and by following their finest investments, Insider Monkey has come up with many investment strategies that have historically outrun the broader indices. Insider Monkey's flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points annually since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
[caption id="attachment_27480" align="aligncenter" width="450"] Israel Englander of Millennium Management[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. 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 even check out this option genius' weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager's investor letter and the stock already gained 20 percent. Now we're going to take a look at the key hedge fund action encompassing Citizens Community Bancorp Inc. (NASDAQ:CZWI).
What have hedge funds been doing with Citizens Community Bancorp Inc. (NASDAQ:CZWI)?
At the end of the third quarter, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 33% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in CZWI 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.
When looking at the institutional investors followed by Insider Monkey, Emanuel J. Friedman's EJF Capital has the biggest position in Citizens Community Bancorp Inc. (NASDAQ:CZWI), worth close to $3.9 million, comprising 0.5% of its total 13F portfolio. Coming in second is Tontine Asset Management, led by Jeffrey Gendell, holding a $3.6 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that hold long positions comprise Israel Englander's Millennium Management, Renaissance Technologies and . In terms of the portfolio weights assigned to each position EJF Capital allocated the biggest weight to Citizens Community Bancorp Inc. (NASDAQ:CZWI), around 0.53% of its 13F portfolio. Tontine Asset Management is also relatively very bullish on the stock, setting aside 0.51 percent of its 13F equity portfolio to CZWI.
As industrywide interest jumped, specific money managers were leading the bulls' herd. Millennium Management, managed by Israel Englander, assembled the biggest position in Citizens Community Bancorp Inc. (NASDAQ:CZWI). Millennium Management had $0.6 million invested in the company at the end of the quarter.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Citizens Community Bancorp Inc. (NASDAQ:CZWI) but similarly valued. We will take a look at Travelzoo (NASDAQ:TZOO), Ovid Therapeutics Inc. (NASDAQ:OVID), Old Point Financial Corporation (NASDAQ:OPOF), and MEI Pharma Inc (NASDAQ:MEIP). This group of stocks' market caps are similar to CZWI's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TZOO,9,16544,0 OVID,9,12627,3 OPOF,3,2797,1 MEIP,13,29548,0 Average,8.5,15379,1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.5 hedge funds with bullish positions and the average amount invested in these stocks was $15 million. That figure was $8 million in CZWI's case. MEI Pharma Inc (NASDAQ:MEIP) is the most popular stock in this table. On the other hand Old Point Financial Corporation (NASDAQ:OPOF) is the least popular one with only 3 bullish hedge fund positions. Citizens Community Bancorp Inc. (NASDAQ:CZWI) is not the least popular stock in this group but hedge fund interest is still below 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. A small number of hedge funds were also right about betting on CZWI, though not to the same extent, as the stock returned 7.9% during the first two months of the fourth quarter and outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.