Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow over 700 of the best-performing investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Cooper Tire & Rubber Company (NYSE:CTB), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Cooper Tire & Rubber Company (NYSE:CTB) investors should pay attention to a decrease in hedge fund interest lately. 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 Primerica, Inc. (NYSE:PRI), Banco Macro SA (ADR) (NYSE:BMA), and Companhia Energetica Minas Gerais (ADR) (NYSE:CIG) to gather more data points.
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In today’s marketplace there are plenty of signals shareholders employ to size up stocks. A pair of the most under-the-radar signals are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the top picks of the best investment managers can outpace the broader indices by a significant margin (see the details here).
Keeping this in mind, let’s review the new action regarding Cooper Tire & Rubber Company (NYSE:CTB).
How have hedgies been trading Cooper Tire & Rubber Company (NYSE:CTB)?
At the end of the third quarter, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a decline of 12% from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Anchor Bolt Capital, managed by Robert Polak, holds the number one position in Cooper Tire & Rubber Company (NYSE:CTB). The fund has a $26.1 million stake in the stock, comprising 0.9% of its 13F portfolio. The second most bullish fund manager is GAMCO Investors, managed by Mario Gabelli, which holds a $22.3 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining peers that hold long positions encompass Cliff Asness’s AQR Capital Management, David Dreman’s Dreman Value Management and George McCabe’s Portolan Capital Management.
Judging by the fact that Cooper Tire & Rubber Company (NYSE:CTB) has witnessed a decline in sentiment from hedge fund managers, logic holds that there lies a certain “tier” of funds who were dropping their full holdings last quarter. Interestingly, Joel Greenblatt’s Gotham Asset Management sold off the biggest investment of the “upper crust” of funds followed by Insider Monkey, comprising about $44.5 million in stock, and Chuck Royce’s Royce & Associates was right behind this move, as the fund dropped about $7.6 million worth of CTB shares. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 3 funds last quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Cooper Tire & Rubber Company (NYSE:CTB) but similarly valued. We will take a look at Primerica, Inc. (NYSE:PRI), Banco Macro SA (ADR) (NYSE:BMA), Companhia Energetica Minas Gerais (ADR) (NYSE:CIG), and Bloomin’ Brands Inc (NASDAQ:BLMN). All of these stocks’ market caps resemble CTB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PRI | 15 | 265573 | -3 |
| BMA | 13 | 66701 | -1 |
| CIG | 11 | 24330 | 0 |
| BLMN | 30 | 408066 | -5 |
As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $191 million. That figure was $121 million in CTB’s case, below average, which not a positive sign. Bloomin’ Brands Inc (NASDAQ:BLMN) is the most popular stock in this table. On the other hand Companhia Energetica Minas Gerais (ADR) (NYSE:CIG) is the least popular one with only 11 bullish hedge fund positions. Cooper Tire & Rubber Company (NYSE:CTB) is not the most popular stock in this group, but hedge fund interest is still above average. While this is a slightly positive signal, we’d rather spend our time researching stocks that hedge funds are piling on. In this regard BLMN might be a better candidate to consider a long position.
