We have been waiting for this for a year and finally the third quarter ended up showing a nice bump in the performance of small-cap stocks. Both the S&P 500 and Russell 2000 were up since the end of the second quarter, but small-cap stocks outperformed the large-cap stocks by double digits. This is important for hedge funds, which are big supporters of small-cap stocks, because their investors started pulling some of their capital out due to poor recent performance. It is very likely that equity hedge funds will deliver better risk adjusted returns in the second half of this year. In this article we are going to look at how this recent market trend affected the sentiment of hedge funds towards Corelogic Inc (NYSE:CLGX), and what that likely means for the prospects of the company and its stock.
Corelogic Inc (NYSE:CLGX) has experienced a decrease in enthusiasm from smart money of late, with 3 fewer hedge funds owning its shares on September 30 as did on June 30. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Cabelas Inc (NYSE:CAB), Teledyne Technologies Incorporated (NYSE:TDY), and Genesee & Wyoming Inc (NYSE:GWR) to gather more data points.
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How have hedgies been trading Corelogic Inc (NYSE:CLGX)?
At Q3’s end, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 14% drop from the previous quarter. Hedge fund ownership of the stock has now fallen by over 33% over the last year. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, D E Shaw has the number one position in Corelogic Inc (NYSE:CLGX), worth close to $116.9 million. The second largest stake is held by Fisher Asset Management, led by Ken Fisher, holding a $72.5 million position. Remaining members of the smart money that are bullish contain Robert Pohly’s Samlyn Capital, Cliff Asness’ AQR Capital Management and Ken Griffin’s Citadel Investment Group.
Seeing as Corelogic Inc (NYSE:CLGX) has witnessed bearish sentiment from the smart money, it’s easy to see that there exists a select few hedgies who were dropping their positions entirely heading into Q4. At the top of the heap, Seymour Sy Kaufman and Michael Stark’s Crosslink Capital said goodbye to the biggest stake of the “upper crust” of funds followed by Insider Monkey, totaling close to $18.8 million in stock, and Dmitry Balyasny’s Balyasny Asset Management was right behind this move, as the fund cut about $9.7 million worth of shares. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 3 funds heading into Q4.
Let’s now take a look at hedge fund activity in other stocks similar to Corelogic Inc (NYSE:CLGX). These stocks are Cabelas Inc (NYSE:CAB), Teledyne Technologies Incorporated (NYSE:TDY), Genesee & Wyoming Inc (NYSE:GWR), and Umpqua Holdings Corp (NASDAQ:UMPQ). All of these stocks’ market caps match CLGX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CAB | 34 | 961197 | 7 |
| TDY | 13 | 125132 | 3 |
| GWR | 12 | 169440 | -4 |
| UMPQ | 20 | 198200 | 3 |
As you can see these stocks had an average of 19.75 hedge funds with bullish positions and the average amount invested in these stocks was $363 million. That figure was $387 million in CLGX’s case. Cabelas Inc (NYSE:CAB) is the most popular stock in this table. On the other hand Genesee & Wyoming Inc (NYSE:GWR) is the least popular one with only 12 bullish hedge fund positions. Corelogic Inc (NYSE:CLGX) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard CAB might be a better candidate to consider a long position in.
Disclosure: None
