Like everyone else, elite investors make mistakes. Some of their top consensus picks, such as Amazon, Facebook and Alibaba, have not done well in Q4 of 2018 due to various reasons. Nevertheless, the data show elite investors’ consensus picks have done well on average over the long-term. The top 20 stocks among hedge funds beat the S&P 500 Index ETFs by nearly 10 percentage points during the first 11 months of 2019. Because their consensus picks have done well, we pay attention to what elite funds think before doing extensive research on a stock. In this article, we take a closer look at BanColombia S.A. (NYSE:CIB) from the perspective of those elite funds.
Is BanColombia S.A. (NYSE:CIB) worth your attention right now? Prominent investors are taking an optimistic view. The number of long hedge fund positions increased by 1 recently. Our calculations also showed that CIB isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In today’s marketplace there are a multitude of tools stock market investors put to use to appraise their holdings. Some of the most underrated tools are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the top picks of the top investment managers can outpace the S&P 500 by a healthy amount (see the details here).
Richard Driehaus of Driehaus Capital
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December we recommended Adams Energy based on an under-the-radar fund manager’s investor letter and the stock gained 20 percent. We’re going to go over the new hedge fund action surrounding BanColombia S.A. (NYSE:CIB).
How are hedge funds trading BanColombia S.A. (NYSE:CIB)?
At the end of the third quarter, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 10% from the second quarter of 2019. On the other hand, there were a total of 5 hedge funds with a bullish position in CIB a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Polaris Capital Management held the most valuable stake in BanColombia S.A. (NYSE:CIB), which was worth $98 million at the end of the third quarter. On the second spot was Driehaus Capital which amassed $18.8 million worth of shares. Renaissance Technologies, Arrowstreet Capital, and McKinley Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Polaris Capital Management allocated the biggest weight to BanColombia S.A. (NYSE:CIB), around 4.4% of its 13F portfolio. Driehaus Capital is also relatively very bullish on the stock, designating 0.61 percent of its 13F equity portfolio to CIB.
Consequently, key money managers were leading the bulls’ herd. McKinley Capital Management, managed by Robert B. Gillam, initiated the largest position in BanColombia S.A. (NYSE:CIB). McKinley Capital Management had $7.1 million invested in the company at the end of the quarter. Bruce Kovner’s Caxton Associates also initiated a $0.3 million position during the quarter. The only other fund with a brand new CIB position is Paul Marshall and Ian Wace’s Marshall Wace.
Let’s check out hedge fund activity in other stocks similar to BanColombia S.A. (NYSE:CIB). We will take a look at Roku, Inc. (NASDAQ:ROKU), J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT), Advance Auto Parts, Inc. (NYSE:AAP), and Okta, Inc. (NASDAQ:OKTA). All of these stocks’ market caps are similar to CIB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ROKU | 37 | 322495 | 4 |
| JBHT | 22 | 347136 | 2 |
| AAP | 36 | 1497113 | -1 |
| OKTA | 49 | 1120794 | 10 |
| Average | 36 | 821885 | 3.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 36 hedge funds with bullish positions and the average amount invested in these stocks was $822 million. That figure was $166 million in CIB’s case. Okta, Inc. (NASDAQ:OKTA) is the most popular stock in this table. On the other hand J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) is the least popular one with only 22 bullish hedge fund positions. Compared to these stocks BanColombia S.A. (NYSE:CIB) is even less popular than JBHT. Hedge funds dodged a bullet by taking a bearish stance towards CIB. Our calculations showed that the top 20 most popular hedge fund stocks returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately CIB wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); CIB investors were disappointed as the stock returned -2.4% during the fourth quarter (through the end of November) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market so far in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
