Do Hedge Funds Love Collectors Universe, Inc. (CLCT)?

Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips on the charts, usually don’t make them change their opinion towards a company. This time it may be different. During the third quarter we observed increased volatility and small-cap stocks underperformed the market. Hedge fund investor letters indicated that they are cutting their overall exposure, closing out some position and doubling down on others. Let’s take a look at the hedge fund sentiment towards Collectors Universe, Inc. (NASDAQ:CLCT) to find out whether it was one of their high conviction long-term ideas.

Collectors Universe, Inc. (NASDAQ:CLCT)’s stock lost 24% in the first nine months of 2015 and most investors that we track have been overlooking the stock, although the number of funds with long positions inched up in the third quarter. However, the level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives, since the 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 Dixie Group Inc (NASDAQ:DXYN), Unilife Corp (NASDAQ:UNIS), and Accuride Corporation (NYSE:ACW) to gather more data points.

In today’s marketplace, there are plenty of formulas investors have at their disposal to analyze publicly traded companies. Two of the most innovative formulas are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the top picks of the top investment managers can trounce the broader indices by a significant amount (see the details here).

With all of this in mind, we’re going to take a glance at the key action surrounding Collectors Universe, Inc. (NASDAQ:CLCT).

Hedge fund activity in Collectors Universe, Inc. (NASDAQ:CLCT)

At the Q3’s end, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, up by 25% over the quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies, holds the largest position in Collectors Universe, Inc. (NASDAQ:CLCT). Renaissance Technologies has a $11.6 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second most bullish fund manager is Royce & Associates, managed by Chuck Royce, which holds a $2.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other peers that are bullish, include Peter Algert and Kevin Coldiron’s Algert Coldiron Investors, John Overdeck and David Siegel’s Two Sigma Advisors and Ken Griffin’s Citadel Investment Group.

As one would reasonably expect, key hedge funds were breaking ground themselves. Algert Coldiron Investors established the most outsized position in Collectors Universe, Inc. (NASDAQ:CLCT), as it had $0.9 million invested in the company at the end of the quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Collectors Universe, Inc. (NASDAQ:CLCT) but similarly valued. We will take a look at Dixie Group Inc (NASDAQ:DXYN), Unilife Corp (NASDAQ:UNIS), Accuride Corporation (NYSE:ACW), and Lantheus Holdings Inc (NASDAQ:LNTH). This group of stocks’ market valuations resemble CLCT’s market valuation.

As you can see these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $15 million. That figure was $15 million in CLCT’s case. Accuride Corporation (NYSE:ACW) is the most popular stock in this table. On the other hand Unilife Corp (NASDAQ:UNIS) is the least popular one with only 4 bullish hedge fund positions. Collectors Universe, Inc. (NASDAQ:CLCT) 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 ACW might be a better candidate to consider a long position.