Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
Is Century Communities, Inc (NYSE:CCS) the right pick for your portfolio? Prominent investors are taking an optimistic view. The number of bullish hedge fund bets increased by 1 in recent months. Our calculations also showed that CCS 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 18 percentage points since May 2014 through December 3, 2018 (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 24% through December 3, 2018. 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 glance at the recent hedge fund action surrounding Century Communities, Inc (NYSE:CCS).
Hedge fund activity in Century Communities, Inc (NYSE:CCS)
Heading into the fourth quarter of 2018, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of 5% from the second quarter of 2018. The graph below displays the number of hedge funds with bullish position in CCS over the last 13 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Oaktree Capital Management held the most valuable stake in Century Communities, Inc (NYSE:CCS), which was worth $47.7 million at the end of the third quarter. On the second spot was Millennium Management which amassed $36.4 million worth of shares. Moreover, Long Pond Capital, Basswood Capital, and Sabrepoint Capital were also bullish on Century Communities, Inc (NYSE:CCS), allocating a large percentage of their portfolios to this stock.
As one would reasonably expect, specific money managers were breaking ground themselves. Long Pond Capital, managed by John Khoury, assembled the most valuable position in Century Communities, Inc (NYSE:CCS). Long Pond Capital had $34.6 million invested in the company at the end of the quarter. Richard S. Meisenberg’s ACK Asset Management also made a $4.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Jim Simons’s Renaissance Technologies and David Costen Haley’s HBK Investments.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Century Communities, Inc (NYSE:CCS) but similarly valued. These stocks are Marine Products Corp. (NYSE:MPX), Mechel OAO (NYSE:MTL), Tekla Healthcare Opportunities Fund (NYSE:THQ), and Ehi Car Services Ltd (NYSE:EHIC). All of these stocks’ market caps are closest to CCS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MPX | 5 | 28478 | 2 |
| MTL | 3 | 852 | -1 |
| THQ | 2 | 523 | 2 |
| EHIC | 6 | 46422 | 0 |
| Average | 4 | 19069 | 0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 4 hedge funds with bullish positions and the average amount invested in these stocks was $19 million. That figure was $217 million in CCS’s case. Ehi Car Services Ltd (NYSE:EHIC) is the most popular stock in this table. On the other hand 0 is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Century Communities, Inc (NYSE:CCS) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None. This article was originally published at Insider Monkey.
