Insider Monkey finished processing more than 738 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2019. In this article we are going to take a look at smart money sentiment towards Cision Ltd. (NYSE:CISN).
Hedge fund interest in Cision Ltd. (NYSE:CISN) 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 Upwork Inc. (NASDAQ:UPWK), Groupon Inc (NASDAQ:GRPN), and Avanos Medical, Inc. (NYSE:AVNS) to gather more data points.
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.
We're going to review the new hedge fund action surrounding Cision Ltd. (NYSE:CISN).
Hedge fund activity in Cision Ltd. (NYSE:CISN)
Heading into the second quarter of 2019, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CISN over the last 15 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists an "upper tier" of notable hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
According to Insider Monkey's hedge fund database, Alan Fournier's Pennant Capital Management has the number one position in Cision Ltd. (NYSE:CISN), worth close to $16.4 million, accounting for 6.7% of its total 13F portfolio. On Pennant Capital Management's heels is Steadfast Capital Management, led by Robert Pitts, holding a $12.5 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Some other members of the smart money with similar optimism consist of Julian Allen's Spitfire Capital, Robert Rodriguez and Steven Romick's First Pacific Advisors LLC and Noam Gottesman's GLG Partners.
Seeing as Cision Ltd. (NYSE:CISN) has experienced declining sentiment from the smart money, it's safe to say that there is a sect of funds who sold off their full holdings last quarter. Interestingly, Mark N. Diker's Diker Management said goodbye to the largest position of the "upper crust" of funds monitored by Insider Monkey, valued at close to $1.3 million in stock, and Benjamin A. Smith's Laurion Capital Management was right behind this move, as the fund sold off about $0.1 million worth. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now review hedge fund activity in other stocks similar to Cision Ltd. (NYSE:CISN). We will take a look at Upwork Inc. (NASDAQ:UPWK), Groupon Inc (NASDAQ:GRPN), Avanos Medical, Inc. (NYSE:AVNS), and BEST Inc. (NYSE:BEST). All of these stocks' market caps resemble CISN's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position UPWK,9,10600,2 GRPN,26,405688,2 AVNS,11,40801,-3 BEST,16,62721,7 Average,15.5,129953,2 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.5 hedge funds with bullish positions and the average amount invested in these stocks was $130 million. That figure was $51 million in CISN's case. Groupon Inc (NASDAQ:GRPN) is the most popular stock in this table. On the other hand Upwork Inc. (NASDAQ:UPWK) is the least popular one with only 9 bullish hedge fund positions. Cision Ltd. (NYSE:CISN) 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 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately CISN wasn't nearly as popular as these 20 stocks and hedge funds that were betting on CISN were disappointed as the stock returned -16.7% 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.