Hedge funds run by legendary names like George Soros and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources on analyzing and uncovering data about small-cap stocks that the big brokerage houses don’t follow. Small caps are where they can generate significant outperformance. That’s why we pay special attention to hedge fund activity in these stocks.
Is Central Pacific Financial Corp. (NYSE:CPF) a healthy stock for your portfolio? Prominent investors are in a bullish mood. The number of bullish hedge fund positions moved up by 2 in recent months. Our calculations also showed that cpf isn’t among the 30 most popular stocks among hedge funds.
At the moment there are tons of signals stock market investors use to analyze their holdings. A couple of the most underrated signals are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the top picks of the best fund managers can trounce the market by a solid margin (see the details here).
Noam Gottesman, GLG Partners
We’re going to take a glance at the fresh hedge fund action encompassing Central Pacific Financial Corp. (NYSE:CPF).
What does smart money think about Central Pacific Financial Corp. (NYSE:CPF)?
Heading into the second quarter of 2019, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a change of 14% from one quarter earlier. On the other hand, there were a total of 14 hedge funds with a bullish position in CPF a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Central Pacific Financial Corp. (NYSE:CPF) was held by Renaissance Technologies, which reported holding $19.9 million worth of stock at the end of March. It was followed by GLG Partners with a $10.7 million position. Other investors bullish on the company included Prospector Partners, D E Shaw, and Millennium Management.
Consequently, key money managers were breaking ground themselves. Bailard Inc, managed by Thomas Bailard, created the most outsized position in Central Pacific Financial Corp. (NYSE:CPF). Bailard Inc had $0.5 million invested in the company at the end of the quarter. Michael Platt and William Reeves’s BlueCrest Capital Mgmt. also initiated a $0.2 million position during the quarter.
Let’s go over hedge fund activity in other stocks similar to Central Pacific Financial Corp. (NYSE:CPF). These stocks are Tivity Health, Inc. (NASDAQ:TVTY), SeaDrill Limited (NYSE:SDRL), AdvanSix Inc. (NYSE:ASIX), and Coeur Mining, Inc. (NYSE:CDE). This group of stocks’ market values match CPF’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TVTY | 20 | 166987 | -1 |
| SDRL | 20 | 249408 | -2 |
| ASIX | 19 | 147109 | 0 |
| CDE | 11 | 25132 | -2 |
| Average | 17.5 | 147159 | -1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.5 hedge funds with bullish positions and the average amount invested in these stocks was $147 million. That figure was $77 million in CPF’s case. Tivity Health, Inc. (NASDAQ:TVTY) is the most popular stock in this table. On the other hand Coeur Mining, Inc. (NYSE:CDE) is the least popular one with only 11 bullish hedge fund positions. Central Pacific Financial Corp. (NYSE:CPF) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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. Unfortunately CPF wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); CPF investors were disappointed as the stock returned -0.1% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
