In this article we will check out the progression of hedge fund sentiment towards Cimpress plc (NASDAQ:CMPR) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Cimpress plc (NASDAQ:CMPR) has experienced a decrease in hedge fund interest in recent months. Cimpress plc (NASDAQ:CMPR) was in 21 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 25. There were 23 hedge funds in our database with CMPR positions at the end of the fourth quarter. Our calculations also showed that CMPR isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 115 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.
Peter Rathjens of Arrowstreet Capital
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Do Hedge Funds Think CMPR Is A Good Stock To Buy Now?
At first quarter’s end, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -9% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CMPR over the last 23 quarters. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
More specifically, Spruce House Investment Management was the largest shareholder of Cimpress plc (NASDAQ:CMPR), with a stake worth $236.2 million reported as of the end of March. Trailing Spruce House Investment Management was Bares Capital Management, which amassed a stake valued at $12.7 million. D E Shaw, Diamond Hill Capital, and Phoenician 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 Spruce House Investment Management allocated the biggest weight to Cimpress plc (NASDAQ:CMPR), around 6.77% of its 13F portfolio. Phoenician Capital is also relatively very bullish on the stock, setting aside 3.88 percent of its 13F equity portfolio to CMPR.
Seeing as Cimpress plc (NASDAQ:CMPR) has witnessed a decline in interest from hedge fund managers, we can see that there is a sect of fund managers that elected to cut their entire stakes heading into Q2. Interestingly, Renaissance Technologies said goodbye to the largest stake of the “upper crust” of funds tracked by Insider Monkey, valued at close to $1.4 million in stock. Steve Cohen’s fund, Point72 Asset Management, also said goodbye to its stock, about $1.3 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 2 funds heading into Q2.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Cimpress plc (NASDAQ:CMPR) but similarly valued. These stocks are Mimecast Limited (NASDAQ:MIME), Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH), MGE Energy, Inc. (NASDAQ:MGEE), Cadence Bancorporation (NYSE:CADE), Winnebago Industries, Inc. (NYSE:WGO), Uniti Group Inc. (NASDAQ:UNIT), and Nova Measuring Instruments Ltd. (NASDAQ:NVMI). This group of stocks’ market caps match CMPR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MIME | 24 | 221415 | -4 |
| DCPH | 23 | 511975 | -13 |
| MGEE | 8 | 37474 | 2 |
| CADE | 27 | 176068 | 8 |
| WGO | 30 | 440894 | 3 |
| UNIT | 17 | 306823 | 0 |
| NVMI | 16 | 342917 | 0 |
| Average | 20.7 | 291081 | -0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.7 hedge funds with bullish positions and the average amount invested in these stocks was $291 million. That figure was $307 million in CMPR’s case. Winnebago Industries, Inc. (NYSE:WGO) is the most popular stock in this table. On the other hand MGE Energy, Inc. (NASDAQ:MGEE) is the least popular one with only 8 bullish hedge fund positions. Cimpress plc (NASDAQ:CMPR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CMPR is 57.7. 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 23.8% in 2021 through July 16th and still beat the market by 7.7 percentage points. Hedge funds were also right about betting on CMPR, though not to the same extent, as the stock returned 13.7% since Q1 (through July 16th) and outperformed the market as well.
Follow Cimpress Plc (NASDAQ:CMPR)
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Disclosure: None. This article was originally published at Insider Monkey.
