Based on the fact that hedge funds have collectively under-performed the market for several years, it would be easy to assume that their stock picks simply aren’t very good. However, our research shows this not to be the case. In fact, when it comes to their very top picks collectively, they show a strong ability to pick winning stocks. This year hedge funds’ top 30 stock picks easily bested the broader market, at 6.7% compared to 2.6%, despite there being a few duds in there like Facebook (even their collective wisdom isn’t perfect). The results show that there is plenty of merit to imitating the collective wisdom of top investors.
Comfort Systems USA, Inc. (NYSE:FIX) was in 22 hedge funds’ portfolios at the end of the third quarter of 2018. FIX investors should pay attention to an increase in support from the world’s most elite money managers of late. There were 20 hedge funds in our database with FIX holdings at the end of the previous quarter. Our calculations also showed that FIX isn’t among the 30 most popular stocks among hedge funds.
To the average investor there are plenty of gauges market participants put to use to analyze publicly traded companies. A pair of the less utilized gauges are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the best picks of the best investment managers can outclass the S&P 500 by a very impressive margin (see the details here).
Let’s check out the new hedge fund action surrounding Comfort Systems USA, Inc. (NYSE:FIX).
How have hedgies been trading Comfort Systems USA, Inc. (NYSE:FIX)?
Heading into the fourth quarter of 2018, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 10% from the second quarter of 2018. On the other hand, there were a total of 18 hedge funds with a bullish position in FIX at the beginning of this year. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Daruma Asset Management, managed by Mariko Gordon, holds the largest position in Comfort Systems USA, Inc. (NYSE:FIX). Daruma Asset Management has a $42.4 million position in the stock, comprising 4% of its 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, led by Jim Simons, holding a $38.7 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers that hold long positions comprise Israel Englander’s Millennium Management, Ian Simm’s Impax Asset Management and Noam Gottesman’s GLG Partners.
Consequently, specific money managers have jumped into Comfort Systems USA, Inc. (NYSE:FIX) headfirst. Impax Asset Management, managed by Ian Simm, initiated the largest position in Comfort Systems USA, Inc. (NYSE:FIX). Impax Asset Management had $18.9 million invested in the company at the end of the quarter. Richard Driehaus’s Driehaus Capital also initiated a $7.4 million position during the quarter. The following funds were also among the new FIX investors: Brandon Haley’s Holocene Advisors, Joel Greenblatt’s Gotham Asset Management, and Roger Ibbotson’s Zebra Capital Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Comfort Systems USA, Inc. (NYSE:FIX) but similarly valued. These stocks are CRISPR Therapeutics AG (NASDAQ:CRSP), Dillard’s, Inc. (NYSE:DDS), Forward Air Corporation (NASDAQ:FWRD), and Hope Bancorp, Inc. (NASDAQ:HOPE). This group of stocks’ market values resemble FIX’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CRSP | 16 | 172273 | -1 |
| DDS | 16 | 153752 | 0 |
| FWRD | 15 | 100893 | -1 |
| HOPE | 14 | 81903 | 7 |
| Average | 15.25 | 127205 | 1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.25 hedge funds with bullish positions and the average amount invested in these stocks was $127 million. That figure was $208 million in FIX’s case. CRISPR Therapeutics AG (NASDAQ:CRSP) is the most popular stock in this table. On the other hand Hope Bancorp, Inc. (NASDAQ:HOPE) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks Comfort Systems USA, Inc. (NYSE:FIX) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None. This article was originally published at Insider Monkey.
