Hedge Funds Are Snapping Up Century Bancorp, Inc. (CNBKA)

In this article you are going to find out whether hedge funds think Century Bancorp, Inc. (NASDAQ:CNBKA) 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.

Century Bancorp, Inc. (NASDAQ:CNBKA) investors should pay attention to an increase in enthusiasm from smart money lately. Century Bancorp, Inc. (NASDAQ:CNBKA) was in 10 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 5. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that CNBKA isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

Today there are plenty of methods stock traders have at their disposal to grade their holdings. Some of the most under-the-radar methods are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the top picks of the best hedge fund managers can outpace the S&P 500 by a significant margin (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 .

James Dondero of Highland Capital Management

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. With all of this in mind we’re going to review the latest hedge fund action surrounding Century Bancorp, Inc. (NASDAQ:CNBKA).

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

At the end of the second quarter, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 150% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CNBKA over the last 24 quarters. So, let’s check out 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 Century Bancorp, Inc. (NASDAQ:CNBKA), which was worth $20.1 million at the end of the second quarter. On the second spot was Magnetar Capital which amassed $17.1 million worth of shares. Highland Capital Management, Millennium Management, and Minerva Advisors 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 Minerva Advisors allocated the biggest weight to Century Bancorp, Inc. (NASDAQ:CNBKA), around 1.03% of its 13F portfolio. Highland Capital Management is also relatively very bullish on the stock, dishing out 0.84 percent of its 13F equity portfolio to CNBKA.

As aggregate interest increased, key hedge funds were breaking ground themselves. Magnetar Capital, managed by Alec Litowitz and Ross Laser, created the largest position in Century Bancorp, Inc. (NASDAQ:CNBKA). Magnetar Capital had $17.1 million invested in the company at the end of the quarter. James Dondero’s Highland Capital Management also initiated a $3.9 million position during the quarter. The other funds with new positions in the stock are Mario Gabelli’s GAMCO Investors, Wayne Yu’s BCK Capital, and Paul Tudor Jones’s Tudor Investment Corp.

Let’s also examine hedge fund activity in other stocks similar to Century Bancorp, Inc. (NASDAQ:CNBKA). We will take a look at ReneSola Ltd. (NYSE:SOL), The RMR Group Inc. (NASDAQ:RMR), McEwen Mining Inc (NYSE:MUX), Hess Midstream LP (NYSE:HESM), OneWater Marine Inc. (NASDAQ:ONEW), Chinook Therapeutics, Inc. (NASDAQ:KDNY), and Comtech Telecommunications Corp. (NASDAQ:CMTL). This group of stocks’ market caps are closest to CNBKA’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 11.4 hedge funds with bullish positions and the average amount invested in these stocks was $84 million. That figure was $51 million in CNBKA’s case. Chinook Therapeutics, Inc. (NASDAQ:KDNY) is the most popular stock in this table. On the other hand ReneSola Ltd. (NYSE:SOL) is the least popular one with only 4 bullish hedge fund positions. Century Bancorp, Inc. (NASDAQ:CNBKA) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CNBKA 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 negative signal and 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 25.7% in 2021 through September 27th and surpassed the market again by 6.2 percentage points. Unfortunately CNBKA wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); CNBKA investors were disappointed as the stock returned 1% since the end of June (through 9/27) 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 in 2021.

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