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Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 817 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds' 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Corenergy Infrastructure Trust Inc (NYSE:CORR) in this article.
Is Corenergy Infrastructure Trust Inc (NYSE:CORR) ready to rally soon? Money managers were in a bearish mood. The number of bullish hedge fund bets retreated by 3 recently. Corenergy Infrastructure Trust Inc (NYSE:CORR) was in 6 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistics is 11. Our calculations also showed that CORR 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).
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 has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
David Siegel of Two Sigma Advisors
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 review the latest hedge fund action encompassing Corenergy Infrastructure Trust Inc (NYSE:CORR).
Hedge fund activity in Corenergy Infrastructure Trust Inc (NYSE:CORR)
At Q3's end, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, a change of -33% from the previous quarter. By comparison, 9 hedge funds held shares or bullish call options in CORR 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.
The largest stake in Corenergy Infrastructure Trust Inc (NYSE:CORR) was held by Renaissance Technologies, which reported holding $4.4 million worth of stock at the end of September. It was followed by Two Sigma Advisors with a $1.1 million position. Other investors bullish on the company included Arrowstreet Capital, D E Shaw, and Winton Capital Management. In terms of the portfolio weights assigned to each position Renaissance Technologies allocated the biggest weight to Corenergy Infrastructure Trust Inc (NYSE:CORR), around 0.0044% of its 13F portfolio. Winton Capital Management is also relatively very bullish on the stock, designating 0.0039 percent of its 13F equity portfolio to CORR.
Because Corenergy Infrastructure Trust Inc (NYSE:CORR) has experienced bearish sentiment from the aggregate hedge fund industry, it's safe to say that there were a few hedgies who were dropping their entire stakes in the third quarter. It's worth mentioning that Michael Gelband's ExodusPoint Capital dumped the biggest position of the 750 funds followed by Insider Monkey, worth close to $0.3 million in stock. Greg Eisner's fund, Engineers Gate Manager, also cut its stock, about $0.2 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 3 funds in the third quarter.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Corenergy Infrastructure Trust Inc (NYSE:CORR) but similarly valued. These stocks are DiaMedica Therapeutics Inc. (NASDAQ:DMAC), CF Bankshares Inc (NASDAQ:CFBK), Hall of Fame Resort & Entertainment Company (NASDAQ:HOFV), Old Point Financial Corporation (NASDAQ:OPOF), Limestone Bancorp, Inc. (NASDAQ:LMST), Lake Shore Bancorp, Inc. (NASDAQ:LSBK), and Lifeway Foods, Inc. (NASDAQ:LWAY). This group of stocks' market valuations are similar to CORR's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position DMAC,10,22656,4 CFBK,1,3248,0 HOFV,3,457,3 OPOF,2,2006,-1 LMST,2,3897,0 LSBK,1,353,0 LWAY,4,2691,1 Average,3.3,5044,1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.3 hedge funds with bullish positions and the average amount invested in these stocks was $5 million. That figure was $7 million in CORR's case. DiaMedica Therapeutics Inc. (NASDAQ:DMAC) is the most popular stock in this table. On the other hand CF Bankshares Inc (NASDAQ:CFBK) is the least popular one with only 1 bullish hedge fund positions. Corenergy Infrastructure Trust Inc (NYSE:CORR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CORR is 46.1. 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 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. Hedge funds were also right about betting on CORR as the stock returned 11.4% since the end of Q3 (through 11/27) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.