We are still in an overall bull market and many stocks that smart money investors were piling into surged through October 17th. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 45% and 39% respectively. Hedge funds' top 3 stock picks returned 34.4% this year and beat the S&P 500 ETFs by 13 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 Core-Mark Holding Company, Inc. (NASDAQ:CORE).
Hedge fund interest in Core-Mark Holding Company, Inc. (NASDAQ:CORE) shares was flat at the end of last quarter. This is usually a negative indicator. 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 Progress Software Corporation (NASDAQ:PRGS), ServisFirst Bancshares, Inc. (NASDAQ:SFBS), and TransAlta Corporation (NYSE:TAC) to gather more data points. Our calculations also showed that CORE isn't among the 30 most popular stocks among hedge funds (see the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of signals stock market investors employ to grade stocks. A duo of the most useful signals are hedge fund and insider trading signals. We have shown that, historically, those who follow the top picks of the elite hedge fund managers can beat the broader indices by a significant margin (see the details here).
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We're going to take a glance at the fresh hedge fund action encompassing Core-Mark Holding Company, Inc. (NASDAQ:CORE).
Hedge fund activity in Core-Mark Holding Company, Inc. (NASDAQ:CORE)
At Q2's end, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 13 hedge funds with a bullish position in CORE a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
The largest stake in Core-Mark Holding Company, Inc. (NASDAQ:CORE) was held by Renaissance Technologies, which reported holding $16.7 million worth of stock at the end of March. It was followed by GLG Partners with a $15.6 million position. Other investors bullish on the company included D E Shaw, Two Sigma Advisors, and Arrowstreet Capital.
Because Core-Mark Holding Company, Inc. (NASDAQ:CORE) has experienced declining sentiment from hedge fund managers, it's easy to see that there was a specific group of hedge funds that decided to sell off their entire stakes last quarter. Intriguingly, John Lykouretzos's Hoplite Capital Management said goodbye to the largest position of the 750 funds tracked by Insider Monkey, worth about $14.7 million in stock. David Costen Haley's fund, HBK Investments, also dropped its stock, about $2 million worth. These transactions are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Core-Mark Holding Company, Inc. (NASDAQ:CORE) but similarly valued. We will take a look at Progress Software Corporation (NASDAQ:PRGS), ServisFirst Bancshares, Inc. (NASDAQ:SFBS), TransAlta Corporation (NYSE:TAC), and USANA Health Sciences, Inc. (NYSE:USNA). This group of stocks' market caps match CORE's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PRGS,24,268304,0 SFBS,9,12767,-1 TAC,9,29727,-2 USNA,13,248443,-9 Average,13.75,139810,-3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $140 million. That figure was $72 million in CORE's case. Progress Software Corporation (NASDAQ:PRGS) is the most popular stock in this table. On the other hand ServisFirst Bancshares, Inc. (NASDAQ:SFBS) is the least popular one with only 9 bullish hedge fund positions. Core-Mark Holding Company, Inc. (NASDAQ:CORE) 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 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately CORE wasn't nearly as popular as these 20 stocks and hedge funds that were betting on CORE were disappointed as the stock returned -18.9% during the third quarter 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.