Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 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 Chico’s FAS, Inc. (NYSE:CHS) in this article.
Is Chico’s FAS, Inc. (NYSE:CHS) a buy right now? Prominent investors were becoming hopeful. The number of bullish hedge fund bets went up by 7 lately. Chico’s FAS, Inc. (NYSE:CHS) was in 22 hedge funds’ portfolios at the end of June. The all time high for this statistic is 25. Our calculations also showed that CHS isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
If you’d ask most traders, hedge funds are assumed to be underperforming, old financial vehicles of years past. While there are over 8000 funds trading today, Our experts look at the crème de la crème of this group, around 850 funds. These investment experts direct the majority of all hedge funds’ total capital, and by paying attention to their matchless investments, Insider Monkey has determined a few investment strategies that have historically exceeded the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.
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Do Hedge Funds Think CHS Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 47% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in CHS over the last 24 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies has the largest position in Chico’s FAS, Inc. (NYSE:CHS), worth close to $45.5 million, comprising 0.1% of its total 13F portfolio. Coming in second is Contrarius Investment Management, managed by Stephen Mildenhall, which holds a $44.1 million position; 2.1% of its 13F portfolio is allocated to the company. Some other members of the smart money that hold long positions contain Chuck Royce’s Royce & Associates, Bill Miller’s Miller Value Partners and James Woodson Davis’s Woodson Capital Management. In terms of the portfolio weights assigned to each position Barington Capital Group allocated the biggest weight to Chico’s FAS, Inc. (NYSE:CHS), around 11.27% of its 13F portfolio. Contrarius Investment Management is also relatively very bullish on the stock, dishing out 2.14 percent of its 13F equity portfolio to CHS.
As one would reasonably expect, key money managers have jumped into Chico’s FAS, Inc. (NYSE:CHS) headfirst. Woodson Capital Management, managed by James Woodson Davis, established the largest position in Chico’s FAS, Inc. (NYSE:CHS). Woodson Capital Management had $13.2 million invested in the company at the end of the quarter. Richard Scott Greeder’s Broad Bay Capital also made a $7.5 million investment in the stock during the quarter. The following funds were also among the new CHS investors: Ben Gordon’s Blue Grotto Capital, Brian J. Higgins’s King Street Capital, and Bruce Kovner’s Caxton Associates LP.
Let’s go over hedge fund activity in other stocks similar to Chico’s FAS, Inc. (NYSE:CHS). These stocks are HarborOne Bancorp, Inc. (NASDAQ:HONE), Citi Trends, Inc. (NASDAQ:CTRN), Clarus Corporation (NASDAQ:CLAR), Luokung Technology Corp (NASDAQ:LKCO), Taysha Gene Therapies, Inc. (NASDAQ:TSHA), Lindblad Expeditions Holdings Inc (NASDAQ:LIND), and Armada Hoffler Properties Inc (NYSE:AHH). All of these stocks’ market caps are similar to CHS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HONE | 13 | 39910 | -1 |
| CTRN | 25 | 186058 | 1 |
| CLAR | 17 | 97540 | 2 |
| LKCO | 1 | 646 | 0 |
| TSHA | 8 | 36005 | 1 |
| LIND | 8 | 66402 | -3 |
| AHH | 10 | 51210 | 1 |
| Average | 11.7 | 68253 | 0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.7 hedge funds with bullish positions and the average amount invested in these stocks was $68 million. That figure was $178 million in CHS’s case. Citi Trends, Inc. (NASDAQ:CTRN) is the most popular stock in this table. On the other hand Luokung Technology Corp (NASDAQ:LKCO) is the least popular one with only 1 bullish hedge fund positions. Chico’s FAS, Inc. (NYSE:CHS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CHS is 80.2. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 24% in 2021 through October 22nd and beat the market again by 1.6 percentage points. Unfortunately CHS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CHS were disappointed as the stock returned -23.4% since the end of June (through 10/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Chico's Fas Inc. (NYSE:CHS)
Follow Chico's Fas Inc. (NYSE:CHS)
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Disclosure: None. This article was originally published at Insider Monkey.
