At Insider Monkey we follow nearly 750 of the best-performing investors and even though many of them lost money in the last couple of months of 2018 (some actually delivered very strong returns), the history teaches us that over the long-run they still manage to beat the market, which is why it can be profitable for us to imitate their activity. Of course, even the best money managers can sometimes get it wrong, but following some of their picks gives us a better chance to outperform the crowd than picking a random stock and this is where our research comes in.
Is CONSOL Coal Resources LP (NYSE:CCR) an outstanding stock to buy now? Hedge funds are getting more bullish. The number of bullish hedge fund bets went up by 1 in recent months. Our calculations also showed that CCR isn’t among the 30 most popular stocks among hedge funds. CCR was in 5 hedge funds’ portfolios at the end of December. There were 4 hedge funds in our database with CCR positions at the end of the previous quarter.
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 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We’re going to check out the key hedge fund action encompassing CONSOL Coal Resources LP (NYSE:CCR).
How are hedge funds trading CONSOL Coal Resources LP (NYSE:CCR)?
Heading into the first quarter of 2019, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 25% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CCR over the last 14 quarters. 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, Greenlight Capital was the largest shareholder of CONSOL Coal Resources LP (NYSE:CCR), with a stake worth $90.1 million reported as of the end of December. Trailing Greenlight Capital was Mountain Lake Investment Management, which amassed a stake valued at $5.8 million. Renaissance Technologies, EJF Capital, and Arrowstreet Capital were also very fond of the stock, giving the stock large weights in their portfolios.
As industrywide interest jumped, key hedge funds were breaking ground themselves. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, assembled the largest position in CONSOL Coal Resources LP (NYSE:CCR). Arrowstreet Capital had $0.2 million invested in the company at the end of the quarter.
Let’s check out hedge fund activity in other stocks similar to CONSOL Coal Resources LP (NYSE:CCR). We will take a look at Forum Energy Technologies Inc (NYSE:FET), Kezar Life Sciences, Inc. (NASDAQ:KZR), The Bancorp, Inc. (NASDAQ:TBBK), and Gritstone Oncology, Inc. (NASDAQ:GRTS). This group of stocks’ market valuations resemble CCR’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FET | 11 | 52956 | 2 |
| KZR | 4 | 67447 | -3 |
| TBBK | 14 | 70000 | 1 |
| GRTS | 9 | 97302 | -6 |
| Average | 9.5 | 71926 | -1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.5 hedge funds with bullish positions and the average amount invested in these stocks was $72 million. That figure was $97 million in CCR’s case. The Bancorp, Inc. (NASDAQ:TBBK) is the most popular stock in this table. On the other hand Kezar Life Sciences, Inc. (NASDAQ:KZR) is the least popular one with only 4 bullish hedge fund positions. CONSOL Coal Resources LP (NYSE:CCR) 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 CCR wasn’t nearly as popular as these 15 stock (hedge fund sentiment was quite bearish); CCR investors were disappointed as the stock returned 9.6% 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.
