A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended December 31, so let’s proceed with the discussion of the hedge fund sentiment on C&J Energy Services, Inc (NYSE:CJ).
C&J Energy Services, Inc (NYSE:CJ) shares haven't seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 25 hedge funds' portfolios at the end of the fourth quarter of 2018. 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 NCI Building Systems, Inc. (NYSE:NCS), Coeur Mining, Inc. (NYSE:CDE), and Third Point Reinsurance Ltd (NYSE:TPRE) to gather more data points.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We're going to take a look at the new hedge fund action regarding C&J Energy Services, Inc (NYSE:CJ).
How have hedgies been trading C&J Energy Services, Inc (NYSE:CJ)?
At the end of the fourth quarter, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CJ over the last 14 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Point72 Asset Management was the largest shareholder of C&J Energy Services, Inc (NYSE:CJ), with a stake worth $48.6 million reported as of the end of December. Trailing Point72 Asset Management was Solus Alternative Asset Management, which amassed a stake valued at $47.8 million. Glendon Capital Management, Whitebox Advisors, and Oaktree Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.
Since C&J Energy Services, Inc (NYSE:CJ) has faced falling interest from the entirety of the hedge funds we track, it's safe to say that there was a specific group of fund managers that slashed their full holdings last quarter. Interestingly, Anand Parekh's Alyeska Investment Group sold off the biggest investment of the "upper crust" of funds watched by Insider Monkey, valued at an estimated $13 million in stock, and Stephen Feinberg's Cerberus Capital Management was right behind this move, as the fund dropped about $12.7 million worth. These transactions 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 - not necessarily in the same industry as C&J Energy Services, Inc (NYSE:CJ) but similarly valued. We will take a look at NCI Building Systems, Inc. (NYSE:NCS), Coeur Mining, Inc. (NYSE:CDE), Third Point Reinsurance Ltd (NYSE:TPRE), and Scorpio Tankers Inc. (NYSE:STNG). This group of stocks' market caps resemble CJ's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NCS,20,74692,-8 CDE,13,44363,0 TPRE,18,52264,4 STNG,10,82830,-4 Average,15.25,63537,-2 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.25 hedge funds with bullish positions and the average amount invested in these stocks was $64 million. That figure was $255 million in CJ's case. NCI Building Systems, Inc. (NYSE:NCS) is the most popular stock in this table. On the other hand Scorpio Tankers Inc. (NYSE:STNG) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks C&J Energy Services, Inc (NYSE:CJ) is more popular among hedge funds. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Hedge funds were also right about betting on CJ, though not to the same extent, as the stock returned 17.7% and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.