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Last year we predicted the arrival of the first US recession since 2009 and we told in advance 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 Centrus Energy Corp. (NYSE:LEU).
Is Centrus Energy Corp. (NYSE:LEU) undervalued? Hedge funds were taking a bullish view. The number of long hedge fund bets went up by 2 in recent months. Centrus Energy Corp. (NYSE:LEU) was in 6 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 4. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that LEU isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 4 hedge funds in our database with LEU positions at the end of the fourth quarter.
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Ken Griffin of Citadel Investment Group
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $24 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. With all of this in mind we're going to take a look at the key hedge fund action regarding Centrus Energy Corp. (NYSE:LEU).
Do Hedge Funds Think LEU Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 50% from one quarter earlier. By comparison, 2 hedge funds held shares or bullish call options in LEU a year ago. So, let's see 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 Centrus Energy Corp. (NYSE:LEU), which was worth $11.2 million at the end of the fourth quarter. On the second spot was Millennium Management which amassed $3.2 million worth of shares. Citadel Investment Group, ExodusPoint Capital, and Citadel Investment Group 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 Manatuck Hill Partners allocated the biggest weight to Centrus Energy Corp. (NYSE:LEU), around 0.12% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, dishing out 0.01 percent of its 13F equity portfolio to LEU.
Consequently, specific money managers have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, assembled the most valuable position in Centrus Energy Corp. (NYSE:LEU). Citadel Investment Group had $0.5 million invested in the company at the end of the quarter. Mark Broach's Manatuck Hill Partners also made a $0.4 million investment in the stock during the quarter. The only other fund with a new position in the stock is Thomas Bailard's Bailard Inc.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Centrus Energy Corp. (NYSE:LEU) but similarly valued. We will take a look at Net 1 UEPS Technologies Inc (NASDAQ:UEPS), iRadimed Corporation (NASDAQ:IRMD), G. Willi-Food International Limited (NASDAQ:WILC), Cheetah Mobile Inc (NYSE:CMCM), Utah Medical Products, Inc. (NASDAQ:UTMD), Atento SA (NYSE:ATTO), and Neuronetics, Inc. (NASDAQ:STIM). This group of stocks' market valuations match LEU's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position UEPS,8,23623,-3 IRMD,3,50698,-2 WILC,2,31828,0 CMCM,4,3156,0 UTMD,4,28627,-2 ATTO,5,128141,-1 STIM,19,123225,4 Average,6.4,55614,-0.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.4 hedge funds with bullish positions and the average amount invested in these stocks was $56 million. That figure was $16 million in LEU's case. Neuronetics, Inc. (NASDAQ:STIM) is the most popular stock in this table. On the other hand G. Willi-Food International Limited (NASDAQ:WILC) is the least popular one with only 2 bullish hedge fund positions. Centrus Energy Corp. (NYSE:LEU) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for LEU is 48.8. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 19.3% in 2021 through June 25th and beat the market by 4.8 percentage points. A small number of hedge funds were also right about betting on LEU, though not to the same extent, as the stock returned 11.1% since the end of Q1 (through June 25th) and outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.