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Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the third quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of US Concrete Inc (NASDAQ:USCR) based on that data.
Is USCR a good stock to buy now? Hedge fund interest in US Concrete Inc (NASDAQ:USCR) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that USCR isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). At the end of this article we will also compare USCR to other stocks including Homology Medicines, Inc. (NASDAQ:FIXX), CAI International Inc (NYSE:CAI), and Plantronics, Inc. (NYSE:PLT) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 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 13% through November 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Matthew Hulsizer of PEAK6 Capital
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind let's take a peek at the fresh hedge fund action encompassing US Concrete Inc (NASDAQ:USCR).
Do Hedge Funds Think USCR Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 16 hedge funds with a bullish position in USCR 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.
Among these funds, Royce & Associates held the most valuable stake in US Concrete Inc (NASDAQ:USCR), which was worth $12.1 million at the end of the third quarter. On the second spot was Arrowstreet Capital which amassed $7.9 million worth of shares. Citadel Investment Group, PEAK6 Capital Management, and Two Sigma Advisors 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 Royce & Associates allocated the biggest weight to US Concrete Inc (NASDAQ:USCR), around 0.13% of its 13F portfolio. Engineers Gate Manager is also relatively very bullish on the stock, designating 0.03 percent of its 13F equity portfolio to USCR.
Judging by the fact that US Concrete Inc (NASDAQ:USCR) has experienced falling interest from the aggregate hedge fund industry, we can see that there lies a certain "tier" of fund managers that decided to sell off their full holdings by the end of the third quarter. Intriguingly, Dmitry Balyasny's Balyasny Asset Management dumped the biggest position of the 750 funds followed by Insider Monkey, totaling an estimated $2.3 million in stock, and Paul Marshall and Ian Wace's Marshall Wace LLP was right behind this move, as the fund said goodbye to about $1.2 million worth. These moves are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as US Concrete Inc (NASDAQ:USCR) but similarly valued. We will take a look at Homology Medicines, Inc. (NASDAQ:FIXX), CAI International Inc (NYSE:CAI), Plantronics, Inc. (NYSE:PLT), Banco Latinoamericano de Comercio Exterior, S.A. (NYSE:BLX), MagnaChip Semiconductor Corporation (NYSE:MX), Preferred Bank (NASDAQ:PFBC), and Ocular Therapeutix Inc (NASDAQ:OCUL). This group of stocks' market caps resemble USCR's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position FIXX,11,18591,-5 CAI,10,118924,1 PLT,14,20398,4 BLX,2,9318,-1 MX,27,252487,2 PFBC,10,20264,1 OCUL,12,105293,1 Average,12.3,77896,0.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.3 hedge funds with bullish positions and the average amount invested in these stocks was $78 million. That figure was $26 million in USCR's case. MagnaChip Semiconductor Corporation (NYSE:MX) is the most popular stock in this table. On the other hand Banco Latinoamericano de Comercio Exterior, S.A. (NYSE:BLX) is the least popular one with only 2 bullish hedge fund positions. US Concrete Inc (NASDAQ:USCR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for USCR is 30.7. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on USCR as the stock returned 26.6% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.