As we already know from media reports and hedge fund investor letters, many hedge funds lost money in October, blaming macroeconomic conditions and unpredictable events that hit several sectors, with healthcare among them. Nevertheless, most investors decided to stick to their bullish theses and their long-term focus allows us to profit from the recent declines. In particular, let’s take a look at what hedge funds think about Criteo SA (NASDAQ:CRTO) in this article.
Is Criteo SA (NASDAQ:CRTO) a buy, sell, or hold? The smart money is becoming hopeful. The number of long hedge fund positions advanced by 3 recently. Our calculations also showed that CRTO 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’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Let’s take a peek at the fresh hedge fund action regarding Criteo SA (NASDAQ:CRTO).
What have hedge funds been doing with Criteo SA (NASDAQ:CRTO)?
At the end of the third quarter, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of 38% from the previous quarter. On the other hand, there were a total of 9 hedge funds with a bullish position in CRTO at the beginning of this year. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, International Value Advisers held the most valuable stake in Criteo SA (NASDAQ:CRTO), which was worth $85.1 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $30.8 million worth of shares. Moreover, Okumus Fund Management, Point72 Asset Management, and Millennium Management were also bullish on Criteo SA (NASDAQ:CRTO), allocating a large percentage of their portfolios to this stock.
Consequently, key money managers were leading the bulls’ herd. Okumus Fund Management, managed by Ahmet Okumus, assembled the most valuable position in Criteo SA (NASDAQ:CRTO). Okumus Fund Management had $18.1 million invested in the company at the end of the quarter. Joe Milano’s Greenhouse Funds also made a $7.5 million investment in the stock during the quarter. The following funds were also among the new CRTO investors: Jim Roumell’s Roumell Asset Management, Paul Tudor Jones’s Tudor Investment Corp, and Joe Milano’s Greenhouse Funds.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Criteo SA (NASDAQ:CRTO) but similarly valued. These stocks are Rush Enterprises, Inc. (NASDAQ:RUSHA), TherapeuticsMD Inc (NASDAQ:TXMD), TiVo Corporation (NASDAQ:TIVO), and EnPro Industries, Inc. (NYSE:NPO). This group of stocks’ market caps are closest to CRTO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RUSHA | 20 | 150213 | 1 |
| TXMD | 14 | 76456 | 6 |
| TIVO | 18 | 111313 | 1 |
| NPO | 16 | 137214 | 6 |
| Average | 17 | 118799 | 3.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $119 million. That figure was $176 million in CRTO’s case. Rush Enterprises, Inc. (NASDAQ:RUSHA) is the most popular stock in this table. On the other hand TherapeuticsMD Inc (NASDAQ:TXMD) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks Criteo SA (NASDAQ:CRTO) is even less popular than TXMD. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
Disclosure: None. This article was originally published at Insider Monkey.
