The market has been volatile in the fourth quarter as the Federal Reserve continued its rate hikes to normalize the interest rates. Small cap stocks have been hit hard as a result, as the Russell 2000 ETF (IWM) has underperformed the larger S&P 500 ETF (SPY) by nearly 7 percentage points. SEC filings and hedge fund investor letters indicate that the smart money seems to be paring back their overall long exposure since summer months, and the funds’ movements is one of the reasons why the major indexes have retraced. In this article, we analyze what the smart money thinks of Cision Ltd. (NYSE:CISN) and find out how it is affected by hedge funds’ moves.
Hedge fund interest in Cision Ltd. (NYSE:CISN) 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 CISN to other stocks including Pretium Resources Inc (NYSE:PVG), CareTrust REIT, Inc. (NASDAQ:CTRE), and The Simply Good Foods Company (NASDAQ:SMPL) to get a better sense of its popularity.
At the moment there are a lot of tools investors have at their disposal to value stocks. A couple of the best tools are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the best picks of the best money managers can outperform the S&P 500 by a solid margin (see the details here).
We’re going to go over the latest hedge fund action encompassing Cision Ltd. (NYSE:CISN).
How have hedgies been trading Cision Ltd. (NYSE:CISN)?
At the end of the fourth quarter, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CISN over the last 14 quarters. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
The largest stake in Cision Ltd. (NYSE:CISN) was held by Pennant Capital Management, which reported holding $16.2 million worth of stock at the end of December. It was followed by Steadfast Capital Management with a $10.6 million position. Other investors bullish on the company included Spitfire Capital, Renaissance Technologies, and First Pacific Advisors LLC.
Due to the fact that Cision Ltd. (NYSE:CISN) has faced bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there was a specific group of funds who sold off their positions entirely by the end of the third quarter. Intriguingly, Israel Englander’s Millennium Management sold off the largest position of the 700 funds watched by Insider Monkey, totaling an estimated $7.4 million in stock, and Ira Unschuld’s Brant Point Investment Management was right behind this move, as the fund dropped about $3.7 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Cision Ltd. (NYSE:CISN) but similarly valued. We will take a look at Pretium Resources Inc (NYSE:PVG), CareTrust REIT, Inc. (NASDAQ:CTRE), The Simply Good Foods Company (NASDAQ:SMPL), and Tower Semiconductor Ltd. (NASDAQ:TSEM). This group of stocks’ market valuations match CISN’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PVG | 22 | 124075 | 5 |
| CTRE | 16 | 125667 | 5 |
| SMPL | 25 | 184420 | 2 |
| TSEM | 16 | 222231 | 3 |
| Average | 19.75 | 164098 | 3.75 |
View table here if you experience formatting issues.
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 $164 million. That figure was $53 million in CISN’s case. The Simply Good Foods Company (NASDAQ:SMPL) is the most popular stock in this table. On the other hand CareTrust REIT, Inc.(NASDAQ:CTRE) is the least popular one with only 16 bullish hedge fund positions. Cision Ltd. (NYSE:CISN) 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 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately CISN wasn’t nearly as popular as these 15 stock (hedge fund sentiment was quite bearish); CISN investors were disappointed as the stock returned 2.8% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
