The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their December 31 holdings, data that is available nowhere else. Should you consider CSW Industrials, Inc. (NASDAQ:CSWI) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is CSW Industrials, Inc. (NASDAQ:CSWI) ready to rally soon? The best stock pickers are getting more bullish. The number of long hedge fund bets increased by 6 in recent months. Our calculations also showed that CSWI isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s analyze the fresh hedge fund action encompassing CSW Industrials, Inc. (NASDAQ:CSWI).
How have hedgies been trading CSW Industrials, Inc. (NASDAQ:CSWI)?
Heading into the first quarter of 2019, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a change of 60% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in CSWI over the last 14 quarters. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Jeffrey Bronchick’s Cove Street Capital has the number one position in CSW Industrials, Inc. (NASDAQ:CSWI), worth close to $15.7 million, corresponding to 2% of its total 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, managed by Jim Simons, which holds a $11.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism include Amit Wadhwaney’s Moerus Capital Management, Cliff Asness’s AQR Capital Management and D. E. Shaw’s D E Shaw.
As one would reasonably expect, specific money managers have jumped into CSW Industrials, Inc. (NASDAQ:CSWI) headfirst. Moerus Capital Management, managed by Amit Wadhwaney, created the most valuable position in CSW Industrials, Inc. (NASDAQ:CSWI). Moerus Capital Management had $6.8 million invested in the company at the end of the quarter. Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital also made a $0.3 million investment in the stock during the quarter. The other funds with brand new CSWI positions are Thomas Bailard’s Bailard Inc, Alec Litowitz and Ross Laser’s Magnetar Capital, and Noam Gottesman’s GLG Partners.
Let’s also examine hedge fund activity in other stocks similar to CSW Industrials, Inc. (NASDAQ:CSWI). We will take a look at Meridian Bioscience, Inc. (NASDAQ:VIVO), Summit Midstream Partners LP (NYSE:SMLP), Enviva Partners, LP (NYSE:EVA), and CorePoint Lodging Inc. (NYSE:CPLG). This group of stocks’ market values are closest to CSWI’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VIVO | 18 | 89748 | 1 |
| SMLP | 3 | 21424 | 0 |
| EVA | 6 | 39882 | 1 |
| CPLG | 16 | 94089 | -7 |
| Average | 10.75 | 61286 | -1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.75 hedge funds with bullish positions and the average amount invested in these stocks was $61 million. That figure was $44 million in CSWI’s case. Meridian Bioscience, Inc. (NASDAQ:VIVO) is the most popular stock in this table. On the other hand Summit Midstream Partners LP (NYSE:SMLP) is the least popular one with only 3 bullish hedge fund positions. CSW Industrials, Inc. (NASDAQ:CSWI) is not the most popular stock in this group but hedge fund interest is still above average. 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. Hedge funds were also right about betting on CSWI, though not to the same extent, as the stock returned 22% and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
