Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the second quarter. You can find write-ups about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves and analyze what the smart money thinks of US Concrete Inc (NASDAQ:USCR) based on that data.
US Concrete Inc (NASDAQ:USCR) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 17 hedge funds’ portfolios at the end of June. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Adecoagro SA (NYSE:AGRO), istar Inc (NYSE:STAR), and Century Communities, Inc (NYSE:CCS) to gather more data points. Our calculations also showed that USCR isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to view the latest hedge fund action encompassing US Concrete Inc (NASDAQ:USCR).
How have hedgies been trading US Concrete Inc (NASDAQ:USCR)?
At Q2’s end, a total of 17 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 USCR over the last 16 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
The largest stake in US Concrete Inc (NASDAQ:USCR) was held by Lomas Capital Management, which reported holding $37.3 million worth of stock at the end of March. It was followed by ACK Asset Management with a $20.4 million position. Other investors bullish on the company included GMT Capital, Red Cedar Management, and Citadel Investment Group.
Seeing as US Concrete Inc (NASDAQ:USCR) has experienced a decline in interest from the entirety of the hedge funds we track, it’s safe to say that there were a few hedge funds that elected to cut their full holdings last quarter. Intriguingly, Israel Englander’s Millennium Management dumped the largest position of the “upper crust” of funds tracked by Insider Monkey, totaling an estimated $0.7 million in stock. Glenn Russell Dubin’s fund, Highbridge Capital Management, also dropped its stock, about $0.6 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as US Concrete Inc (NASDAQ:USCR) but similarly valued. We will take a look at Adecoagro SA (NYSE:AGRO), istar Inc (NYSE:STAR), Century Communities, Inc (NYSE:CCS), and Malibu Boats Inc (NASDAQ:MBUU). This group of stocks’ market caps match USCR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AGRO | 12 | 184237 | -5 |
| STAR | 5 | 66936 | -4 |
| CCS | 17 | 137530 | 1 |
| MBUU | 17 | 103028 | -1 |
| Average | 12.75 | 122933 | -2.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.75 hedge funds with bullish positions and the average amount invested in these stocks was $123 million. That figure was $92 million in USCR’s case. Century Communities, Inc (NYSE:CCS) is the most popular stock in this table. On the other hand istar Inc (NYSE:STAR) is the least popular one with only 5 bullish hedge fund positions. US Concrete Inc (NASDAQ:USCR) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Hedge funds were also right about betting on USCR as the stock returned 11.2% during the third quarter and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
