At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.
Citizens, Inc. (NYSE:CIA) shareholders have witnessed an increase in support from the world’s most successful money managers in recent months. CIA was in 6 hedge funds’ portfolios at the end of September. There were 4 hedge funds in our database with CIA positions at the end of the previous quarter. At the end of this article we will also compare CIA to other stocks including FB Financial Corp(NYSE:FBK), Blucora Inc (NASDAQ:BCOR), and Career Education Corp. (NASDAQ:CECO) to get a better sense of its popularity.
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Follow Citizens Inc. (NYSE:CIA)
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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Now, let’s take a look at the recent action surrounding Citizens, Inc. (NYSE:CIA).
How are hedge funds trading Citizens, Inc. (NYSE:CIA)?
At the end of the third quarter, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, a jump of 50% from one quarter earlier. On the other hand, there were a total of 2 hedge funds with a bullish position in CIA at the beginning of this year. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Jonathan Lennon’s Pleasant Lake Partners has the most valuable position in Citizens, Inc. (NYSE:CIA), worth close to $18.7 million in call options, amounting to 27.3% of its total 13F portfolio. Coming in second is Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital holding a $0.2 million position. Remaining professional money managers that are bullish encompass John Overdeck and David Siegel’s Two Sigma Advisors, Renaissance Technologies which is one of the largest hedge funds in the worldand Israel Englander’s Millennium Management. We should note that none of these hedge funds are 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.
With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. Pleasant Lake Partners assembled the largest new position in Citizens, Inc. (NYSE:CIA), followed closely by Arrowstreet Capital. The only other fund with a new position in the stock is Ken Griffin’s Citadel Investment Group.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Citizens, Inc. (NYSE:CIA) but similarly valued. We will take a look at FB Financial Corp(NYSE:FBK), Blucora Inc (NASDAQ:BCOR), Career Education Corp. (NASDAQ:CECO), and Lands’ End, Inc. (NASDAQ:LE). This group of stocks’ market valuations resemble CIA’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FBK | 12 | 28583 | 12 |
| BCOR | 20 | 73093 | -2 |
| CECO | 16 | 62286 | 7 |
| LE | 9 | 152042 | -1 |
As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $79 million. That figure was $20 million in CIA’s case. Blucora Inc (NASDAQ:BCOR) is the most popular stock in this table. On the other hand Lands’ End, Inc. (NASDAQ:LE) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Citizens, Inc. (NYSE:CIA) is even less popular than LE. 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
