Hedge Funds Are Crazy About Cambium Networks Corporation (CMBM)

In this article you are going to find out whether hedge funds think Cambium Networks Corporation (NASDAQ:CMBM) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.

Cambium Networks Corporation (NASDAQ:CMBM) has seen an increase in activity from the world’s largest hedge funds recently. Cambium Networks Corporation (NASDAQ:CMBM) was in 23 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic was previously 15. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that CMBM isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

In today’s marketplace there are a multitude of metrics investors employ to appraise publicly traded companies. A duo of the most underrated metrics are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the elite hedge fund managers can outperform their index-focused peers by a significant amount (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.

Louis Navellier of Navellier & Associates

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. Now we’re going to take a look at the key hedge fund action surrounding Cambium Networks Corporation (NASDAQ:CMBM).

Do Hedge Funds Think CMBM Is A Good Stock To Buy Now?

At the end of the second quarter, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of 130% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CMBM over the last 24 quarters. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Driehaus Capital, managed by Richard Driehaus, holds the number one position in Cambium Networks Corporation (NASDAQ:CMBM). Driehaus Capital has a $54.8 million position in the stock, comprising 0.7% of its 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, with a $12.4 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 encompass Dmitry Balyasny’s Balyasny Asset Management, John Overdeck and David Siegel’s Two Sigma Advisors and Louis Navellier’s Navellier & Associates. In terms of the portfolio weights assigned to each position Navellier & Associates allocated the biggest weight to Cambium Networks Corporation (NASDAQ:CMBM), around 0.85% of its 13F portfolio. Pinz Capital is also relatively very bullish on the stock, earmarking 0.74 percent of its 13F equity portfolio to CMBM.

As one would reasonably expect, key hedge funds were breaking ground themselves. Balyasny Asset Management, managed by Dmitry Balyasny, created the biggest position in Cambium Networks Corporation (NASDAQ:CMBM). Balyasny Asset Management had $11.3 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $4 million position during the quarter. The other funds with new positions in the stock are Israel Englander’s Millennium Management, Frank Fu’s CaaS Capital, and Matthew L Pinz’s Pinz Capital.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Cambium Networks Corporation (NASDAQ:CMBM) but similarly valued. These stocks are Grupo Financiero Galicia S.A. (NASDAQ:GGAL), Schweitzer-Mauduit International, Inc. (NYSE:SWM), TriCo Bancshares (NASDAQ:TCBK), Zumiez Inc. (NASDAQ:ZUMZ), US Concrete Inc (NASDAQ:USCR), Enova International Inc (NYSE:ENVA), and SilverCrest Metals Inc. (NYSE:SILV). All of these stocks’ market caps match CMBM’s market cap.

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As you can see these stocks had an average of 13.9 hedge funds with bullish positions and the average amount invested in these stocks was $91 million. That figure was $125 million in CMBM’s case. Enova International Inc (NYSE:ENVA) is the most popular stock in this table. On the other hand Grupo Financiero Galicia S.A. (NASDAQ:GGAL) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Cambium Networks Corporation (NASDAQ:CMBM) is more popular among hedge funds. Our overall hedge fund sentiment score for CMBM is 90. 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. 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 still beat the market by 1.6 percentage points. Unfortunately CMBM wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CMBM were disappointed as the stock returned -43.3% since the end of the second quarter (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 most of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.