Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of ICF International Inc (NASDAQ:ICFI).
ICF International Inc (NASDAQ:ICFI) has seen a decrease in hedge fund sentiment recently. Our calculations also showed that ICFI isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Martin Whitman of Third Avenue Management
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. Let’s analyze the fresh hedge fund action surrounding ICF International Inc (NASDAQ:ICFI).
What have hedge funds been doing with ICF International Inc (NASDAQ:ICFI)?
At the end of the third quarter, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -33% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in ICFI over the last 17 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in ICF International Inc (NASDAQ:ICFI) was held by Third Avenue Management, which reported holding $9.5 million worth of stock at the end of September. It was followed by Driehaus Capital with a $6.8 million position. Other investors bullish on the company included AQR Capital Management, Renaissance Technologies, and Winton Capital Management. In terms of the portfolio weights assigned to each position Third Avenue Management allocated the biggest weight to ICF International Inc (NASDAQ:ICFI), around 0.86% of its 13F portfolio. Driehaus Capital is also relatively very bullish on the stock, dishing out 0.22 percent of its 13F equity portfolio to ICFI.
Since ICF International Inc (NASDAQ:ICFI) has faced declining sentiment from hedge fund managers, logic holds that there were a few hedgies that elected to cut their positions entirely by the end of the third quarter. It’s worth mentioning that Israel Englander’s Millennium Management cut the largest position of the “upper crust” of funds followed by Insider Monkey, comprising about $12.2 million in stock, and Paul Marshall and Ian Wace’s Marshall Wace was right behind this move, as the fund dumped about $7.6 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 5 funds by the end of the third quarter.
Let’s go over hedge fund activity in other stocks similar to ICF International Inc (NASDAQ:ICFI). We will take a look at MaxLinear, Inc. (NYSE:MXL), CNOOC Limited (NYSE:CEO), PJT Partners Inc (NYSE:PJT), and Pacira Pharmaceuticals Inc (NASDAQ:PCRX). This group of stocks’ market caps match ICFI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MXL | 12 | 23578 | 5 |
| CEO | 15 | 206809 | 6 |
| PJT | 17 | 149204 | 2 |
| PCRX | 28 | 394779 | 0 |
| Average | 18 | 193593 | 3.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $194 million. That figure was $32 million in ICFI’s case. Pacira Pharmaceuticals Inc (NASDAQ:PCRX) is the most popular stock in this table. On the other hand MaxLinear, Inc. (NYSE:MXL) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks ICF International Inc (NASDAQ:ICFI) is even less popular than MXL. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on ICFI, though not to the same extent, as the stock returned 6.2% during the fourth quarter (through 11/30) and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
