The successful funds run by legendary investors such as Dan Loeb and David Tepper make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentive to do the research necessary to beat the market. That’s why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at CLARCOR Inc. (NYSE:CLC) from the perspective of those successful funds.
Is CLARCOR Inc. (NYSE:CLC) the right pick for your portfolio? The smart money seems to be getting less bullish. The number of bullish hedge fund bets that are revealed through the 13F filings declined by two last quarter. In this way, there were 12 funds in our database with CLC holdings at the end of September. 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 Harbinger Group Inc (NYSE:HRG), Leidos Holdings Inc (NYSE:LDOS), and Education Realty Trust, Inc. (NYSE:EDR) to gather more data points.
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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Keeping this in mind, we’re going to review the fresh action encompassing CLARCOR Inc. (NYSE:CLC).
How have hedgies been trading CLARCOR Inc. (NYSE:CLC)?
At Q3’s end, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, versus 14 funds at the end of June. The graph below displays the number of hedge funds with bullish position in CLC over the last five quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, GAMCO Investors, led by Mario Gabelli, holds the biggest position in CLARCOR Inc. (NYSE:CLC). GAMCO Investors has a $37.1 million position in the stock, comprising 0.2% of its 13F portfolio. On GAMCO Investors’s heels is Chuck Royce’s Royce & Associates, with a $35.7 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish include Ian Simm’s Impax Asset Management, Cliff Asness’ AQR Capital Management, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. We should note that Impax Asset Management is 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.
We already know that not all hedge funds are bullish on the stock and some hedge funds actually cashed in their positions entirely. At the top of the heap, Glenn Russell Dubin’s Highbridge Capital Management cashed in the biggest investment of the “upper crust” of funds watched by Insider Monkey, comprising close to $3.2 million in stock. Phill Gross and Robert Atchinson’s fund, Adage Capital Management, also sold off its stock, about $2.7 million worth.
Let’s go over hedge fund activity in other stocks similar to CLARCOR Inc. (NYSE:CLC). These stocks are Harbinger Group Inc (NYSE:HRG), Leidos Holdings Inc (NYSE:LDOS), Education Realty Trust, Inc. (NYSE:EDR), and Blackbaud, Inc. (NASDAQ:BLKB). This group of stocks’ market values match CLC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HRG | 27 | 1541968 | 2 |
| LDOS | 27 | 644414 | 1 |
| EDR | 11 | 140116 | -3 |
| BLKB | 14 | 126784 | 4 |
As you can see these stocks had an average of 20 funds with bullish positions and the average amount invested in these stocks was $613 million, versus $109 million in CLC’s case. Harbinger Group Inc (NYSE:HRG) and Leidos Holdings Inc (NYSE:LDOS) are the most popular stocks in this table. On the other hand Education Realty Trust, Inc. (NYSE:EDR) is the least popular one with only 11 bullish hedge fund positions. CLARCOR Inc. (NYSE:CLC) 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. In this regard HRG or LDOS might be better candidates to consider taking a long position in.
Disclosure: none
