Insider Monkey finished processing more than 700 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of December 31st, 2018. What do these smart investors think about Chase Corporation (NYSEAMEX:CCF)?
Chase Corporation (NYSEAMEX:CCF) investors should pay attention to a decrease in enthusiasm from smart money in recent months. Our calculations also showed that CCF isn't among the 30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. 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 32 percentage points since May 2014 through March 12, 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 27.5% through March 12, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We're going to take a look at the new hedge fund action regarding Chase Corporation (NYSEAMEX:CCF).
Hedge fund activity in Chase Corporation (NYSEAMEX:CCF)
At the end of the fourth quarter, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -17% from the second quarter of 2018. On the other hand, there were a total of 5 hedge funds with a bullish position in CCF a year ago. With hedge funds' positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
More specifically, Royce & Associates was the largest shareholder of Chase Corporation (NYSEAMEX:CCF), with a stake worth $38.1 million reported as of the end of December. Trailing Royce & Associates was Renaissance Technologies, which amassed a stake valued at $35.9 million. Citadel Investment Group, Zebra Capital Management, and AQR Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.
Judging by the fact that Chase Corporation (NYSEAMEX:CCF) has witnessed falling interest from the smart money, logic holds that there was a specific group of funds who were dropping their positions entirely in the third quarter. At the top of the heap, Israel Englander's Millennium Management sold off the biggest position of all the hedgies tracked by Insider Monkey, totaling about $0.6 million in stock, and Peter Muller's PDT Partners was right behind this move, as the fund cut about $0.2 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 1 funds in the third quarter.
Let's now take a look at hedge fund activity in other stocks similar to Chase Corporation (NYSEAMEX:CCF). These stocks are Changyou.Com Ltd (NASDAQ:CYOU), Frontline Ltd (NYSE:FRO), Playa Hotels & Resorts N.V. (NASDAQ:PLYA), and Continental Building Products Inc (NYSE:CBPX). This group of stocks' market values are similar to CCF's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CYOU,7,49826,1 FRO,6,30525,0 PLYA,20,391454,5 CBPX,16,82997,-2 Average,12.25,138701,1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.25 hedge funds with bullish positions and the average amount invested in these stocks was $139 million. That figure was $75 million in CCF's case. Playa Hotels & Resorts N.V. (NASDAQ:PLYA) is the most popular stock in this table. On the other hand Frontline Ltd (NYSE:FRO) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Chase Corporation (NYSEAMEX:CCF) is even less popular than FRO. Hedge funds dodged a bullet by taking a bearish stance towards CCF. Our calculations showed that the top 15 most popular hedge fund stocks returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately CCF wasn't nearly as popular as these 15 stock (hedge fund sentiment was very bearish); CCF investors were disappointed as the stock returned -8.7% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.