After several tireless days we have finished crunching the numbers from nearly 750 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of December 31. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Carbonite Inc (NASDAQ:CARB).
Is Carbonite Inc (NASDAQ:CARB) a marvelous investment now? Investors who are in the know are reducing their bets on the stock. The number of bullish hedge fund bets decreased by 1 in recent months. Our calculations also showed that carb isn’t among the 30 most popular stocks among hedge funds. CARB was in 16 hedge funds’ portfolios at the end of the fourth quarter of 2018. There were 17 hedge funds in our database with CARB holdings at the end of the previous quarter.
In the eyes of most shareholders, hedge funds are seen as worthless, old investment tools of yesteryear. While there are over 8000 funds in operation at present, We choose to focus on the moguls of this group, around 750 funds. It is estimated that this group of investors oversee bulk of the hedge fund industry’s total capital, and by paying attention to their unrivaled equity investments, Insider Monkey has brought to light a few investment strategies that have historically outstripped the market. Insider Monkey’s flagship hedge fund strategy outstripped the S&P 500 index by nearly 5 percentage points per annum since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 27.5% since February 2017 (through March 12th) even though the market was up nearly 25% during the same period. We just shared a list of 6 short targets in our latest quarterly update and they are already down an average of 6% in less than a month.
Let’s go over the latest hedge fund action encompassing Carbonite Inc (NASDAQ:CARB).
How are hedge funds trading Carbonite Inc (NASDAQ:CARB)?
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 -6% from the previous quarter. By comparison, 15 hedge funds held shares or bullish call options in CARB a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
The largest stake in Carbonite Inc (NASDAQ:CARB) was held by Portolan Capital Management, which reported holding $45.9 million worth of stock at the end of December. It was followed by Renaissance Technologies with a $32.1 million position. Other investors bullish on the company included Millennium Management, AlphaOne Capital Partners, and Two Sigma Advisors.
Since Carbonite Inc (NASDAQ:CARB) has experienced bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there lies a certain “tier” of funds who sold off their full holdings by the end of the third quarter. At the top of the heap, Joseph A. Jolson’s Harvest Capital Strategies cut the largest investment of the “upper crust” of funds followed by Insider Monkey, valued at an estimated $12.5 million in stock, and Brian C. Freckmann’s Lyon Street Capital was right behind this move, as the fund said goodbye to about $7.5 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 1 funds by the end of the third quarter.
Let’s check out hedge fund activity in other stocks similar to Carbonite Inc (NASDAQ:CARB). These stocks are ARMOUR Residential REIT, Inc. (NYSE:ARR), Northern Oil & Gas, Inc. (NYSE:NOG), Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA), and Arbor Realty Trust, Inc. (NYSE:ABR). All of these stocks’ market caps resemble CARB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ARR | 5 | 12194 | 2 |
| NOG | 16 | 103063 | -1 |
| MNTA | 20 | 195727 | 2 |
| ABR | 15 | 21089 | 5 |
| Average | 14 | 83018 | 2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $83 million. That figure was $109 million in CARB’s case. Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA) is the most popular stock in this table. On the other hand ARMOUR Residential REIT, Inc. (NYSE:ARR) is the least popular one with only 5 bullish hedge fund positions. Carbonite Inc (NASDAQ:CARB) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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. Unfortunately CARB wasn’t nearly as popular as these 15 stock and hedge funds that were betting on CARB were disappointed as the stock returned -4.9% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
