You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.
Carriage Services, Inc. (NYSE:CSV) shares didn’t see a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 9 hedge funds’ portfolios at the end of the third quarter of 2016. At the end of this article we will also compare CSV to other stocks including Financial Institutions, Inc. (NASDAQ:FISI), Capital Product Partners L.P. (NASDAQ:CPLP), and SurModics, Inc. (NASDAQ:SRDX) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Now, let’s review the latest action encompassing Carriage Services, Inc. (NYSE:CSV).
How are hedge funds trading Carriage Services, Inc. (NYSE:CSV)?
At the end of the third quarter, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CSV over the last 5 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Renaissance Technologies, one of the largest hedge funds in the world, holds the biggest position in Carriage Services, Inc. (NYSE:CSV). Renaissance Technologies has a $15.5 million position in the stock. Coming in second is D E Shaw, with a $1.4 million position. Remaining hedge funds and institutional investors that hold long positions encompass John Overdeck and David Siegel’s Two Sigma Advisors, Ira Unschuld’s Brant Point Investment Management and Ken Griffin’s Citadel Investment Group. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Stevens Capital Management. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Magnetar Capital).
Let’s check out hedge fund activity in other stocks similar to Carriage Services, Inc. (NYSE:CSV). We will take a look at Financial Institutions, Inc. (NASDAQ:FISI), Capital Product Partners L.P. (NASDAQ:CPLP), SurModics, Inc. (NASDAQ:SRDX), and Boingo Wireless Inc (NASDAQ:WIFI). This group of stocks’ market valuations are similar to CSV’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FISI | 5 | 8111 | 0 |
| CPLP | 4 | 5498 | 0 |
| SRDX | 14 | 69640 | 0 |
| WIFI | 15 | 65884 | -1 |
As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $37 million. That figure was $21 million in CSV’s case. Boingo Wireless Inc (NASDAQ:WIFI) is the most popular stock in this table. On the other hand Capital Product Partners L.P. (NASDAQ:CPLP) is the least popular one with only 4 bullish hedge fund positions. Carriage Services, Inc. (NYSE:CSV) is not the least popular stock in this group but hedge fund interest is just average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard WIFI might be a better candidate to consider taking a long position in.
Disclosure: None
