Hedge Funds Have Never Been This Bullish On Chicken Soup for the Soul Entertainment, Inc. (CSSE)

In this article we will analyze whether Chicken Soup for the Soul Entertainment, Inc. (NASDAQ:CSSE) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.

Chicken Soup for the Soul Entertainment, Inc. (NASDAQ:CSSE) has seen an increase in enthusiasm from smart money lately. Chicken Soup for the Soul Entertainment, Inc. (NASDAQ:CSSE) was in 6 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic was 5. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that CSSE isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

Israel Englander of Millennium Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $24 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s view the recent hedge fund action regarding Chicken Soup for the Soul Entertainment, Inc. (NASDAQ:CSSE).

Do Hedge Funds Think CSSE Is A Good Stock To Buy Now?

At Q1’s end, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, a change of 20% from the fourth quarter of 2020. By comparison, 2 hedge funds held shares or bullish call options in CSSE a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Chicken Soup for the Soul Entertainment, Inc. (NASDAQ:CSSE) was held by Islet Management, which reported holding $12.3 million worth of stock at the end of December. It was followed by Royce & Associates with a $11.6 million position. Other investors bullish on the company included G2 Investment Partners Management, Millennium Management, and ExodusPoint Capital. In terms of the portfolio weights assigned to each position G2 Investment Partners Management allocated the biggest weight to Chicken Soup for the Soul Entertainment, Inc. (NASDAQ:CSSE), around 1.23% of its 13F portfolio. Islet Management is also relatively very bullish on the stock, designating 0.3 percent of its 13F equity portfolio to CSSE.

Now, some big names were leading the bulls’ herd. Islet Management, managed by Joseph Samuels, initiated the largest position in Chicken Soup for the Soul Entertainment, Inc. (NASDAQ:CSSE). Islet Management had $12.3 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $1.6 million position during the quarter. The only other fund with a new position in the stock is Nancy Zevenbergen’s Zevenbergen Capital Investments.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Chicken Soup for the Soul Entertainment, Inc. (NASDAQ:CSSE) but similarly valued. We will take a look at TETRA Technologies, Inc. (NYSE:TTI), Century Casinos, Inc. (NASDAQ:CNTY), Peoples Financial Services Corp. (NASDAQ:PFIS), Tyme Technologies, Inc. (NASDAQ:TYME), GP Strategies Corporation (NYSE:GPX), Pioneer Bancorp, Inc. (NASDAQ:PBFS), and NN, Inc. (NASDAQ:NNBR). This group of stocks’ market caps are similar to CSSE’s market cap.

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As you can see these stocks had an average of 8.7 hedge funds with bullish positions and the average amount invested in these stocks was $28 million. That figure was $34 million in CSSE’s case. TETRA Technologies, Inc. (NYSE:TTI) is the most popular stock in this table. On the other hand Pioneer Bancorp, Inc. (NASDAQ:PBFS) is the least popular one with only 1 bullish hedge fund positions. Chicken Soup for the Soul Entertainment, Inc. (NASDAQ:CSSE) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CSSE is 47.9. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 19.3% in 2021 through June 25th and still beat the market by 4.8 percentage points. A small number of hedge funds were also right about betting on CSSE as the stock returned 76.2% since the end of the first quarter (through 6/25) and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.

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