How do we determine whether Community Trust Bancorp, Inc. (NASDAQ:CTBI) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
Community Trust Bancorp, Inc. (NASDAQ:CTBI) investors should pay attention to an increase in activity from the world’s largest hedge funds lately. CTBI was in 7 hedge funds’ portfolios at the end of September. There were 6 hedge funds in our database with CTBI positions at the end of the previous quarter. Our calculations also showed that CTBI isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most shareholders, hedge funds are perceived as underperforming, old financial vehicles of years past. While there are more than 8000 funds with their doors open at the moment, Our researchers choose to focus on the masters of this group, around 750 funds. These investment experts manage most of the hedge fund industry’s total capital, and by shadowing their finest stock picks, Insider Monkey has unsheathed numerous investment strategies that have historically exceeded the broader indices. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points a year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
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 look at the key hedge fund action surrounding Community Trust Bancorp, Inc. (NASDAQ:CTBI).
How are hedge funds trading Community Trust Bancorp, Inc. (NASDAQ:CTBI)?
At the end of the third quarter, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 17% from the second quarter of 2019. The graph below displays the number of hedge funds with bullish position in CTBI over the last 17 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Renaissance Technologies held the most valuable stake in Community Trust Bancorp, Inc. (NASDAQ:CTBI), which was worth $14.6 million at the end of the third quarter. On the second spot was Winton Capital Management which amassed $1.2 million worth of shares. Two Sigma Advisors, D E Shaw, and Zebra Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Zebra Capital Management allocated the biggest weight to Community Trust Bancorp, Inc. (NASDAQ:CTBI), around 0.46% of its 13F portfolio. Weld Capital Management is also relatively very bullish on the stock, earmarking 0.07 percent of its 13F equity portfolio to CTBI.
Consequently, some big names have jumped into Community Trust Bancorp, Inc. (NASDAQ:CTBI) headfirst. Zebra Capital Management, managed by Roger Ibbotson, assembled the biggest position in Community Trust Bancorp, Inc. (NASDAQ:CTBI). Zebra Capital Management had $0.4 million invested in the company at the end of the quarter. Minhua Zhang’s Weld Capital Management also made a $0.4 million investment in the stock during the quarter. The only other fund with a brand new CTBI position is Ken Griffin’s Citadel Investment Group.
Let’s check out hedge fund activity in other stocks similar to Community Trust Bancorp, Inc. (NASDAQ:CTBI). We will take a look at Anika Therapeutics, Inc. (NASDAQ:ANIK), Monarch Casino & Resort, Inc. (NASDAQ:MCRI), Thermon Group Holdings, Inc. (NYSE:THR), and Urstadt Biddle Properties Inc. (NYSE:UBP). This group of stocks’ market caps are closest to CTBI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ANIK | 17 | 94464 | 1 |
| MCRI | 11 | 117028 | 3 |
| THR | 12 | 39394 | 2 |
| UBP | 2 | 12793 | 0 |
| Average | 10.5 | 65920 | 1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.5 hedge funds with bullish positions and the average amount invested in these stocks was $66 million. That figure was $18 million in CTBI’s case. Anika Therapeutics, Inc. (NASDAQ:ANIK) is the most popular stock in this table. On the other hand Urstadt Biddle Properties Inc. (NYSE:UBP) is the least popular one with only 2 bullish hedge fund positions. Community Trust Bancorp, Inc. (NASDAQ:CTBI) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately CTBI wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); CTBI investors were disappointed as the stock returned 5.5% during the first two months of the fourth quarter 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 in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
