Out of thousands of stocks that are currently traded on the market, it is difficult to determine those that can really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of over 700 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Cameco Corporation (USA) (NYSE:CCJ).
Cameco Corporation (USA) (NYSE:CCJ) investors should be aware of a decrease in activity from the world’s largest hedge funds recently. At the end of this article we will also compare CCJ to other stocks, including Michaels Companies Inc (NASDAQ:MIK), Zillow Inc (NASDAQ:Z), and Quanta Services Inc (NYSE:PWR) to get a better sense of its popularity.
Follow Cameco Corp (NYSE:CCJ)
Follow Cameco Corp (NYSE:CCJ)
According to most shareholders, hedge funds are viewed as unimportant, old investment tools of the past. While there are greater than an 8000 funds with their doors open at present, We look at the upper echelon of this group, approximately 700 funds. These hedge fund managers direct the lion’s share of all hedge funds’ total asset base, and by paying attention to their unrivaled investments, Insider Monkey has discovered several investment strategies that have historically outstripped Mr. Market. Insider Monkey’s small-cap hedge fund strategy outrun the S&P 500 index by 12 percentage points a year for a decade in their back tests.
Now, we’re going to go over the recent action encompassing Cameco Corporation (USA) (NYSE:CCJ).
How have hedgies been trading Cameco Corporation (USA) (NYSE:CCJ)?
At the Q3’s end, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -19% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Adage Capital Management, managed by Phill Gross and Robert Atchinson, holds the most valuable position in Cameco Corporation (USA) (NYSE:CCJ). Adage Capital Management has a $115.3 million position in the stock, comprising 0.3% of its 13F portfolio. The second largest stake is held by Kopernik Global Investors, led by David Iben, holding a $76.6 million position; 16% of its 13F portfolio is allocated to the company. Other peers that hold long positions consist of Thomas E. Claugus’ GMT Capital, Israel Englander’s Millennium Management, and Cliff Asness’ AQR Capital Management.
Due to the fact that Cameco Corporation (USA) (NYSE:CCJ) has faced bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there was a specific group of funds who sold off their positions entirely by the end of the third quarter. It’s worth mentioning that George Soros’ Soros Fund Management dropped the biggest stake of the “upper crust” of funds tracked by Insider Monkey, worth about $52.8 million in stock. Roberto Mignone’s fund, Bridger Management, also dumped its stock, about $11.6 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 5 funds by the end of the third quarter.
Let’s also examine hedge fund activity in other stocks similar to Cameco Corporation (USA) (NYSE:CCJ). We will take a look at Michaels Companies Inc (NASDAQ:MIK), Zillow Inc (NASDAQ:Z), Quanta Services Inc (NYSE:PWR), and Acadia Healthcare Company Inc (NASDAQ:ACHC). This group of stocks’ market caps are similar to CCJ’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MIK | 21 | 275181 | 5 |
| Z | 24 | 391528 | 1 |
| PWR | 30 | 488718 | -8 |
| ACHC | 24 | 225903 | 1 |
As you can see these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $345 million. That figure was $301 million in CCJ’s case. Quanta Services Inc (NYSE:PWR) is the most popular stock in this table, while Michaels Companies Inc (NASDAQ:MIK) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks, Cameco Corporation (USA) (NYSE:CCJ) is even less popular than MIK. 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.
