The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 873 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of June 30th, 2021. In this article we are going to take a look at smart money sentiment towards Cogent Communications Holdings Inc. (NASDAQ:CCOI).
Is Cogent Communications Holdings Inc. (NASDAQ:CCOI) the right investment to pursue these days? Prominent investors were taking a bullish view. The number of bullish hedge fund positions went up by 4 in recent months. Cogent Communications Holdings Inc. (NASDAQ:CCOI) was in 22 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 30. Our calculations also showed that CCOI isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 18 hedge funds in our database with CCOI holdings at the end of March.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Noam Gottesman of GLG Partners
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s take a look at the key hedge fund action regarding Cogent Communications Holdings Inc. (NASDAQ:CCOI).
Do Hedge Funds Think CCOI Is A Good Stock To Buy Now?
At the end of June, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of 22% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards CCOI over the last 24 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Renaissance Technologies held the most valuable stake in Cogent Communications Holdings Inc. (NASDAQ:CCOI), which was worth $173.2 million at the end of the second quarter. On the second spot was MIG Capital which amassed $68.3 million worth of shares. GLG Partners, Skylands Capital, and Intrinsic Edge Capital 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 MIG Capital allocated the biggest weight to Cogent Communications Holdings Inc. (NASDAQ:CCOI), around 6.05% of its 13F portfolio. Skylands Capital is also relatively very bullish on the stock, dishing out 1.63 percent of its 13F equity portfolio to CCOI.
As industrywide interest jumped, specific money managers have jumped into Cogent Communications Holdings Inc. (NASDAQ:CCOI) headfirst. Two Sigma Advisors, managed by John Overdeck and David Siegel, assembled the biggest position in Cogent Communications Holdings Inc. (NASDAQ:CCOI). Two Sigma Advisors had $2.2 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also initiated a $0.6 million position during the quarter. The other funds with brand new CCOI positions are Greg Eisner’s Engineers Gate Manager, Donald Sussman’s Paloma Partners, and Gavin Saitowitz and Cisco J. del Valle’s Prelude Capital (previously Springbok Capital).
Let’s now take a look at hedge fund activity in other stocks similar to Cogent Communications Holdings Inc. (NASDAQ:CCOI). We will take a look at ALLETE Inc (NYSE:ALE), Kirby Corporation (NYSE:KEX), Brookfield Business Partners L.P. (NYSE:BBU), Installed Building Products Inc (NYSE:IBP), Camping World Holdings, Inc. (NYSE:CWH), Spectrum Brands Holdings, Inc. (NYSE:SPB), and Shutterstock Inc (NYSE:SSTK). This group of stocks’ market values resemble CCOI’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ALE | 10 | 73026 | -6 |
| KEX | 21 | 583682 | -2 |
| BBU | 4 | 24531 | 1 |
| IBP | 12 | 55396 | -9 |
| CWH | 20 | 292507 | -4 |
| SPB | 35 | 578244 | -2 |
| SSTK | 18 | 214408 | 0 |
| Average | 17.1 | 260256 | -3.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.1 hedge funds with bullish positions and the average amount invested in these stocks was $260 million. That figure was $304 million in CCOI’s case. Spectrum Brands Holdings, Inc. (NYSE:SPB) is the most popular stock in this table. On the other hand Brookfield Business Partners L.P. (NYSE:BBU) is the least popular one with only 4 bullish hedge fund positions. Cogent Communications Holdings Inc. (NASDAQ:CCOI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CCOI is 60. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through October 22nd and beat the market again by 1.6 percentage points. Unfortunately CCOI wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CCOI were disappointed as the stock returned -2.3% since the end of June (through 10/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Cogent Communications Holdings Inc. (NASDAQ:CCOI)
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Disclosure: None. This article was originally published at Insider Monkey.
