The first quarter was a breeze as Powell pivoted, and China seemed eager to reach a deal with Trump. Both the S&P 500 and Russell 2000 delivered very strong gains as a result, with the Russell 2000, which is composed of smaller companies, outperforming the large-cap stocks slightly during the first quarter. Unfortunately sentiment shifted in May and August as this time China pivoted and Trump put more pressure on China by increasing tariffs. Fourth quarter brought optimism to the markets and hedge funds’ top 20 stock picks performed spectacularly in this volatile environment. These stocks delivered a total gain of 37.4% through the end of November, vs. a gain of 27.5% for the S&P 500 ETF. In this article we will look at how this market volatility affected the sentiment of hedge funds towards Camden National Corporation (NASDAQ:CAC), and what that likely means for the prospects of the company and its stock.
Hedge fund interest in Camden National Corporation (NASDAQ:CAC) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare CAC to other stocks including Vericel Corp (NASDAQ:VCEL), Cytokinetics, Inc. (NASDAQ:CYTK), and Winmark Corporation (NASDAQ:WINA) to get a better sense of its popularity.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most stock holders, hedge funds are assumed to be unimportant, outdated investment vehicles of the past. While there are over 8000 funds with their doors open at present, Our researchers look at the upper echelon of this club, about 750 funds. These investment experts control the lion’s share of the hedge fund industry’s total asset base, and by watching their inimitable investments, Insider Monkey has determined a number of investment strategies that have historically exceeded the broader indices. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points a year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
Chuck Royce of Royce & Associates
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 take a peek at the latest hedge fund action encompassing Camden National Corporation (NASDAQ:CAC).
Hedge fund activity in Camden National Corporation (NASDAQ:CAC)
At the end of the third quarter, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 6 hedge funds with a bullish position in CAC a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Royce & Associates was the largest shareholder of Camden National Corporation (NASDAQ:CAC), with a stake worth $21.5 million reported as of the end of September. Trailing Royce & Associates was Renaissance Technologies, which amassed a stake valued at $21.2 million. Basswood Capital, Minerva Advisors, and Winton Capital Management 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 Camden National Corporation (NASDAQ:CAC), around 3.73% of its 13F portfolio. Basswood Capital is also relatively very bullish on the stock, earmarking 1.03 percent of its 13F equity portfolio to CAC.
Seeing as Camden National Corporation (NASDAQ:CAC) has experienced a decline in interest from hedge fund managers, it’s safe to say that there is a sect of hedge funds who were dropping their entire stakes heading into Q4. At the top of the heap, David E. Shaw’s D E Shaw cut the largest stake of the “upper crust” of funds watched by Insider Monkey, totaling close to $0.3 million in stock, and Israel Englander’s Millennium Management was right behind this move, as the fund said goodbye to about $0.3 million worth. These transactions are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Camden National Corporation (NASDAQ:CAC) but similarly valued. These stocks are Vericel Corp (NASDAQ:VCEL), Cytokinetics, Inc. (NASDAQ:CYTK), Winmark Corporation (NASDAQ:WINA), and HomeStreet Inc (NASDAQ:HMST). All of these stocks’ market caps resemble CAC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VCEL | 16 | 133611 | -1 |
| CYTK | 18 | 130436 | 4 |
| WINA | 9 | 95629 | 3 |
| HMST | 14 | 31095 | 5 |
| Average | 14.25 | 97693 | 2.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.25 hedge funds with bullish positions and the average amount invested in these stocks was $98 million. That figure was $68 million in CAC’s case. Cytokinetics, Inc. (NASDAQ:CYTK) is the most popular stock in this table. On the other hand Winmark Corporation (NASDAQ:WINA) is the least popular one with only 9 bullish hedge fund positions. Camden National Corporation (NASDAQ:CAC) 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. 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. Unfortunately CAC wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); CAC investors were disappointed as the stock returned 1% during the first two months of the fourth quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
