Does Cooper-Standard Holdings Inc (NYSE:CPS) represent a good buying opportunity at the moment? Let’s briefly check the hedge fund interest towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail unconceivably on some occasions, but their stock picks have been generating superior risk-adjusted returns on average over the years.
Cooper-Standard Holdings Inc (NYSE:CPS) investors should be aware of an increase in hedge fund interest of late. Our calculations also showed that CPS isn’t among the 30 most popular stocks among hedge funds.
In today’s marketplace there are numerous formulas market participants can use to analyze their stock investments. A couple of the less utilized formulas are hedge fund and insider trading activity. We have shown that, historically, those who follow the best picks of the best hedge fund managers can trounce the market by a significant amount (see the details here).
Cliff Asness of AQR Capital Management
Let’s take a look at the recent hedge fund action regarding Cooper-Standard Holdings Inc (NYSE:CPS).
What have hedge funds been doing with Cooper-Standard Holdings Inc (NYSE:CPS)?
At the end of the third quarter, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 39% from the previous quarter. By comparison, 13 hedge funds held shares or bullish call options in CPS heading into this year. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Silver Point Capital, managed by Edward A. Mule, holds the most valuable position in Cooper-Standard Holdings Inc (NYSE:CPS). Silver Point Capital has a $46.2 million position in the stock, comprising 4.9% of its 13F portfolio. On Silver Point Capital’s heels is Renaissance Technologies, led by Jim Simons, holding a $24.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish comprise Cliff Asness’s AQR Capital Management, Israel Englander’s Millennium Management and John A. Levin’s Levin Capital Strategies.
Consequently, key money managers were leading the bulls’ herd. North Run Capital, managed by Thomas Ellis and Todd Hammer, created the biggest position in Cooper-Standard Holdings Inc (NYSE:CPS). North Run Capital had $6.4 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also made a $1 million investment in the stock during the quarter. The other funds with new positions in the stock are Mike Vranos’s Ellington, Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital, and Brandon Haley’s Holocene Advisors.
Let’s also examine hedge fund activity in other stocks similar to Cooper-Standard Holdings Inc (NYSE:CPS). These stocks are Groupon Inc (NASDAQ:GRPN), Tesaro Inc (NASDAQ:TSRO), Varonis Systems Inc (NASDAQ:VRNS), and Covanta Holding Corporation (NYSE:CVA). This group of stocks’ market values are similar to CPS’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GRPN | 32 | 280171 | -1 |
| TSRO | 20 | 375053 | -4 |
| VRNS | 22 | 153158 | -4 |
| CVA | 19 | 104819 | 5 |
| Average | 23.25 | 228300 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.25 hedge funds with bullish positions and the average amount invested in these stocks was $228 million. That figure was $134 million in CPS’s case. Groupon Inc (NASDAQ:GRPN) is the most popular stock in this table. On the other hand Covanta Holding Corporation (NYSE:CVA) is the least popular one with only 19 bullish hedge fund positions. Cooper-Standard Holdings Inc (NYSE:CPS) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard GRPN might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
