At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Casella Waste Systems Inc. (NASDAQ:CWST).
Casella Waste Systems Inc. (NASDAQ:CWST) has seen an increase in enthusiasm from smart money recently. CWST was in 16 hedge funds' portfolios at the end of the first quarter of 2020. There were 10 hedge funds in our database with CWST positions at the end of the previous quarter. Our calculations also showed that CWST isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). Video: Watch our video about the top 5 most popular hedge fund stocks.
To most traders, hedge funds are assumed to be slow, outdated financial vehicles of years past. While there are over 8000 funds with their doors open today, Our researchers choose to focus on the leaders of this group, approximately 850 funds. These money managers watch over bulk of the hedge fund industry's total asset base, and by watching their finest stock picks, Insider Monkey has spotted various investment strategies that have historically outperformed the S&P 500 index. Insider Monkey's flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, blockchain technology's influence will go beyond online payments. So, we are checking out this futurist's moonshot opportunities in tech stocks. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let's review the recent hedge fund action surrounding Casella Waste Systems Inc. (NASDAQ:CWST).
How have hedgies been trading Casella Waste Systems Inc. (NASDAQ:CWST)?
Heading into the second quarter of 2020, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 60% from the fourth quarter of 2019. On the other hand, there were a total of 14 hedge funds with a bullish position in CWST a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Renaissance Technologies held the most valuable stake in Casella Waste Systems Inc. (NASDAQ:CWST), which was worth $93.2 million at the end of the third quarter. On the second spot was Driehaus Capital which amassed $9.5 million worth of shares. Two Sigma Advisors, Select Equity Group, and GAMCO Investors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Portolan Capital Management allocated the biggest weight to Casella Waste Systems Inc. (NASDAQ:CWST), around 0.83% of its 13F portfolio. 12th Street Asset Management is also relatively very bullish on the stock, designating 0.61 percent of its 13F equity portfolio to CWST.
With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. Select Equity Group, managed by Robert Joseph Caruso, initiated the biggest position in Casella Waste Systems Inc. (NASDAQ:CWST). Select Equity Group had $6.9 million invested in the company at the end of the quarter. Ken Griffin's Citadel Investment Group also made a $4.7 million investment in the stock during the quarter. The following funds were also among the new CWST investors: Noam Gottesman's GLG Partners, Michael O'Keefe's 12th Street Asset Management, and Ken Fisher's Fisher Asset Management.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Casella Waste Systems Inc. (NASDAQ:CWST) but similarly valued. We will take a look at Dicks Sporting Goods Inc (NYSE:DKS), Compania de Minas Buenaventura SA (NYSE:BVN), Colliers International Group Inc (NASDAQ:CIGI), and Easterly Government Properties Inc (NYSE:DEA). This group of stocks' market values are closest to CWST's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position DKS,27,180902,1 BVN,9,55975,-4 CIGI,10,437647,-3 DEA,11,150675,1 Average,14.25,206300,-1.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.25 hedge funds with bullish positions and the average amount invested in these stocks was $206 million. That figure was $148 million in CWST's case. Dicks Sporting Goods Inc (NYSE:DKS) is the most popular stock in this table. On the other hand Compania de Minas Buenaventura SA (NYSE:BVN) is the least popular one with only 9 bullish hedge fund positions. Casella Waste Systems Inc. (NASDAQ:CWST) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.3% in 2020 through June 25th but still beat the market by 16.8 percentage points. Hedge funds were also right about betting on CWST as the stock returned 27.3% in Q2 (through June 25th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.