Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: Clearwater Paper Corp (NYSE:CLW).
Is Clearwater Paper Corp (NYSE:CLW) a buy here? Hedge funds are indeed becoming more confident. The number of long hedge fund positions that are disclosed in regulatory 13F filings improved by 1 in recent months. CLW was in 13 hedge funds’ portfolios at the end of the third quarter of 2016. There were 12 hedge funds in our database with CLW holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Irsa Inversiones y Rprsntcins SA (ADR) (NYSE:IRS), Analogic Corporation (NASDAQ:ALOG), and McEwen Mining Inc (NYSE:MUX) to gather more data points.
Follow Clearwater Paper Corp (NYSE:CLW)
Follow Clearwater Paper Corp (NYSE:CLW)
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How are hedge funds trading Clearwater Paper Corp (NYSE:CLW)?
At Q3’s end, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a rise of 8% from the second quarter of 2016. The graph below displays the number of hedge funds with bullish position in CLW over the last 5 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Jay Petschek and Steven Major’s Corsair Capital Management has the largest position in Clearwater Paper Corp (NYSE:CLW), worth close to $14.1 million, corresponding to 2.3% of its total 13F portfolio. Coming in second is Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, which holds a $7 million position. Other hedge funds and institutional investors that are bullish include John Overdeck and David Siegel’s Two Sigma Advisors, Renaissance Technologies, one of the largest hedge funds in the world, and Israel Englander’s Millennium Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
With a general bullishness amongst the heavyweights, key money managers have jumped into Clearwater Paper Corp (NYSE:CLW) headfirst. HBK Investments, led by David Costen Haley, created the most outsized position in Clearwater Paper Corp (NYSE:CLW). HBK Investments had $0.8 million invested in the company at the end of the quarter. Matthew Tewksbury’s Stevens Capital Management also initiated a $0.4 million position during the quarter. The following funds were also among the new CLW investors: Robert B. Gillam’s McKinley Capital Management and Matthew Hulsizer’s PEAK6 Capital Management.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Clearwater Paper Corp (NYSE:CLW) but similarly valued. We will take a look at Irsa Inversiones y Rprsntcins SA (ADR) (NYSE:IRS), Analogic Corporation (NASDAQ:ALOG), McEwen Mining Inc (NYSE:MUX), and NuStar GP Holdings, LLC (NYSE:NSH). This group of stocks’ market values resemble CLW’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| IRS | 12 | 89094 | -1 |
| ALOG | 9 | 98968 | -2 |
| MUX | 8 | 17065 | -2 |
| NSH | 4 | 6488 | -2 |
As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $53 million. That figure was $41 million in CLW’s case. Irsa Inversiones y Rprsntcins SA (ADR) (NYSE:IRS) is the most popular stock in this table. On the other hand NuStar GP Holdings, LLC (NYSE:NSH) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Clearwater Paper Corp (NYSE:CLW) 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
