With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the first quarter. One of these stocks was FirstService Corporation (NASDAQ:FSV).
Is FirstService Corporation (NASDAQ:FSV) worth your attention right now? Money managers are taking a pessimistic view. The number of long hedge fund positions retreated by 2 lately. Our calculations also showed that fsv 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 40 percentage points since May 2014 through May 30, 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 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to take a glance at the new hedge fund action encompassing FirstService Corporation (NASDAQ:FSV).
Hedge fund activity in FirstService Corporation (NASDAQ:FSV)
At Q1’s end, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -15% from the previous quarter. By comparison, 9 hedge funds held shares or bullish call options in FSV a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in FirstService Corporation (NASDAQ:FSV), which was worth $82.4 million at the end of the first quarter. On the second spot was Royce & Associates which amassed $19.5 million worth of shares. Moreover, Lionstone Capital Management, Arrowstreet Capital, and Waratah Capital Advisors were also bullish on FirstService Corporation (NASDAQ:FSV), allocating a large percentage of their portfolios to this stock.
Judging by the fact that FirstService Corporation (NASDAQ:FSV) has faced bearish sentiment from the smart money, logic holds that there lies a certain “tier” of money managers who sold off their positions entirely heading into Q3. Intriguingly, D. E. Shaw’s D E Shaw said goodbye to the largest stake of all the hedgies monitored by Insider Monkey, totaling an estimated $0.2 million in stock. Paul Marshall and Ian Wace’s fund, Marshall Wace LLP, also cut its stock, about $0 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 2 funds heading into Q3.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as FirstService Corporation (NASDAQ:FSV) but similarly valued. We will take a look at Gold Fields Limited (NYSE:GFI), Ardagh Group S.A. (NYSE:ARD), Community Bank System, Inc. (NYSE:CBU), and Peabody Energy Corporation (NYSE:BTU). This group of stocks’ market values are similar to FSV’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GFI | 10 | 208835 | 1 |
| ARD | 12 | 53581 | 2 |
| CBU | 8 | 16915 | -3 |
| BTU | 27 | 1577543 | -4 |
| Average | 14.25 | 464219 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.25 hedge funds with bullish positions and the average amount invested in these stocks was $464 million. That figure was $145 million in FSV’s case. Peabody Energy Corporation (NYSE:BTU) is the most popular stock in this table. On the other hand Community Bank System, Inc. (NYSE:CBU) is the least popular one with only 8 bullish hedge fund positions. FirstService Corporation (NASDAQ:FSV) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on FSV as the stock returned 10.5% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
