Does CEVA, Inc. (NASDAQ:CEVA) represent a good buying opportunity at the moment? Let’s quickly check the hedge fund interest towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on satellite photos and other research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail inconceivably on some occasions, but net net their stock picks have been generating superior risk-adjusted returns on average over the years.
CEVA, Inc. (NASDAQ:CEVA) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 10 hedge funds’ portfolios at the end of the third quarter of 2019. At the end of this article we will also compare CEVA to other stocks including Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW), Tredegar Corporation (NYSE:TG), and Akero Therapeutics, Inc. (NASDAQ:AKRO) to get a better sense of its popularity.
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In today’s marketplace there are tons of tools market participants have at their disposal to value their holdings. A duo of the best tools are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the top picks of the top investment managers can trounce the S&P 500 by a superb amount (see the details here).
Jim Simons of Renaissance Technologies
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. Let’s take a glance at the latest hedge fund action regarding CEVA, Inc. (NASDAQ:CEVA).
What have hedge funds been doing with CEVA, Inc. (NASDAQ:CEVA)?
Heading into the fourth quarter of 2019, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CEVA over the last 17 quarters. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
The largest stake in CEVA, Inc. (NASDAQ:CEVA) was held by Renaissance Technologies, which reported holding $9.1 million worth of stock at the end of September. It was followed by D E Shaw with a $5.8 million position. Other investors bullish on the company included Millennium Management, Citadel Investment Group, and Two Sigma Advisors. In terms of the portfolio weights assigned to each position Weld Capital Management allocated the biggest weight to CEVA, Inc. (NASDAQ:CEVA), around 0.12% of its 13F portfolio. Rima Senvest Management is also relatively very bullish on the stock, dishing out 0.1 percent of its 13F equity portfolio to CEVA.
Seeing as CEVA, Inc. (NASDAQ:CEVA) has experienced bearish sentiment from hedge fund managers, logic holds that there was a specific group of fund managers who were dropping their full holdings last quarter. It’s worth mentioning that Paul Tudor Jones’s Tudor Investment Corp dumped the biggest investment of all the hedgies followed by Insider Monkey, valued at close to $0.3 million in stock. Donald Sussman’s fund, Paloma Partners, also said goodbye to its stock, about $0.3 million worth. These transactions are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now take a look at hedge fund activity in other stocks similar to CEVA, Inc. (NASDAQ:CEVA). These stocks are Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW), Tredegar Corporation (NYSE:TG), Akero Therapeutics, Inc. (NASDAQ:AKRO), and Intellia Therapeutics, Inc. (NASDAQ:NTLA). This group of stocks’ market valuations are similar to CEVA’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AAWW | 13 | 28330 | -3 |
| TG | 12 | 73036 | 1 |
| AKRO | 10 | 104249 | -5 |
| NTLA | 11 | 13017 | -1 |
| Average | 11.5 | 54658 | -2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.5 hedge funds with bullish positions and the average amount invested in these stocks was $55 million. That figure was $29 million in CEVA’s case. Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW) is the most popular stock in this table. On the other hand Akero Therapeutics, Inc. (NASDAQ:AKRO) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks CEVA, Inc. (NASDAQ:CEVA) is even less popular than AKRO. Hedge funds dodged a bullet by taking a bearish stance towards CEVA. Our calculations showed that the top 20 most popular hedge fund stocks returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately CEVA wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); CEVA investors were disappointed as the stock returned -13.2% during the fourth quarter (through the end of November) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market so far in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
