The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. What do these smart investors think about Citi Trends, Inc. (NASDAQ:CTRN)?
Is Citi Trends, Inc. (NASDAQ:CTRN) going to take off soon? The smart money is getting more optimistic. The number of bullish hedge fund positions moved up by 3 lately. Our calculations also showed that CTRN 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (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 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_30602" align="aligncenter" width="397"] Philippe Laffont of Coatue Management[/caption]
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. Now let's go over the new hedge fund action surrounding Citi Trends, Inc. (NASDAQ:CTRN).
Hedge fund activity in Citi Trends, Inc. (NASDAQ:CTRN)
At Q1's end, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 25% from the fourth quarter of 2019. On the other hand, there were a total of 12 hedge funds with a bullish position in CTRN a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Citi Trends, Inc. (NASDAQ:CTRN) was held by Renaissance Technologies, which reported holding $4.4 million worth of stock at the end of September. It was followed by AQR Capital Management with a $2.3 million position. Other investors bullish on the company included Cloverdale Capital Management, Royce & Associates, and Arrowstreet Capital. In terms of the portfolio weights assigned to each position Cloverdale Capital Management allocated the biggest weight to Citi Trends, Inc. (NASDAQ:CTRN), around 1.68% of its 13F portfolio. Zebra Capital Management is also relatively very bullish on the stock, designating 0.17 percent of its 13F equity portfolio to CTRN.
Now, key hedge funds have been driving this bullishness. Cloverdale Capital Management, managed by C. Jonathan Gattman, created the largest position in Citi Trends, Inc. (NASDAQ:CTRN). Cloverdale Capital Management had $2.2 million invested in the company at the end of the quarter. Philippe Laffont's Coatue Management also initiated a $0.2 million position during the quarter. The only other fund with a brand new CTRN position is Greg Eisner's Engineers Gate Manager.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Citi Trends, Inc. (NASDAQ:CTRN) but similarly valued. We will take a look at MDC Partners Inc. (NASDAQ:MDCA), IntriCon Corporation (NASDAQ:IIN), Celyad Oncology SA (NASDAQ:CYAD), and Cherry Hill Mortgage Investment Corp (NYSE:CHMI). This group of stocks' market values match CTRN's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MDCA,9,18983,-2 IIN,5,14869,-1 CYAD,1,124,0 CHMI,7,9709,-2 Average,5.5,10921,-1.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.5 hedge funds with bullish positions and the average amount invested in these stocks was $11 million. That figure was $18 million in CTRN's case. MDC Partners Inc. (NASDAQ:MDCA) is the most popular stock in this table. On the other hand Celyad Oncology SA (NASDAQ:CYAD) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Citi Trends, Inc. (NASDAQ:CTRN) is more popular among hedge funds. 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 returned 13.3% in 2020 through June 25th but still managed to beat the market by 16.8 percentage points. Hedge funds were also right about betting on CTRN as the stock returned 84% so far in Q2 (through June 25th) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.