It seems that the masses and most of the financial media hate hedge funds and what they do, but why is this hatred of hedge funds so prominent? At the end of the day, these asset management firms do not gamble the hard-earned money of the people who are on the edge of poverty. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. The S&P 500 Index gained 7.6% in the 12 month-period that ended November 21, while less than 49% of its stocks beat the benchmark. In contrast, the 30 most popular mid-cap stocks among the top hedge fund investors tracked by the Insider Monkey team returned 18% over the same period, which provides evidence that these money managers do have great stock picking abilities. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Corenergy Infrastructure Trust Inc (NYSE:CORR).
Is Corenergy Infrastructure Trust Inc (NYSE:CORR) the right investment to pursue these days? Prominent investors are really getting more optimistic. The number of long hedge fund positions that are disclosed in regulatory 13F filings improved by 3 lately. CORR was in 7 hedge funds’ portfolios at the end of September. There were 4 hedge funds in our database with CORR holdings at the end of the previous quarter. At the end of this article we will also compare CORR to other stocks including Digimarc Corp (NASDAQ:DMRC), Protagonist Therapeutics Inc (NASDAQ:PTGX), and Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) to get a better sense of its popularity.
Follow Corenergy Infrastructure Trust Inc. (NYSE:CORR)
Follow Corenergy Infrastructure Trust Inc. (NYSE:CORR)
We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.
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How have hedgies been trading Corenergy Infrastructure Trust Inc (NYSE:CORR)?
At Q3’s end, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, up by 75% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CORR over the last 5 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, J. Alan Reid, Jr.’s Forward Management has the biggest position in Corenergy Infrastructure Trust Inc (NYSE:CORR), worth close to $19.2 million, comprising 1.5% of its total 13F portfolio. Coming in second is J. Alan Reid, Jr. of Forward Management, with a $9.9 million position. Remaining members of the smart money with similar optimism consist of Renaissance Technologies, one of the largest hedge funds in the world, and Ken Griffin’s Citadel Investment Group. We should note that two of these hedge funds (Forward Management and Forward Management) are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
As aggregate interest increased, key hedge funds were leading the bulls’ herd. Renaissance Technologies initiated the most valuable position in Corenergy Infrastructure Trust Inc (NYSE:CORR). Renaissance Technologies had $2.9 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $2.1 million investment in the stock during the quarter. The other funds with new positions in the stock are Peter Algert and Kevin Coldiron’s Algert Coldiron Investors and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Let’s also examine hedge fund activity in other stocks similar to Corenergy Infrastructure Trust Inc (NYSE:CORR). We will take a look at Digimarc Corp (NASDAQ:DMRC), Protagonist Therapeutics Inc (NASDAQ:PTGX), Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL), and MidWestOne Financial Group, Inc. (NASDAQ:MOFG). All of these stocks’ market caps are closest to CORR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DMRC | 6 | 38689 | 1 |
| PTGX | 5 | 76793 | 5 |
| RIGL | 20 | 76901 | 1 |
| MOFG | 3 | 19582 | -1 |
As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $53 million. That figure was $39 million in CORR’s case. Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) is the most popular stock in this table. On the other hand MidWestOne Financial Group, Inc. (NASDAQ:MOFG) is the least popular one with only 3 bullish hedge fund positions. Corenergy Infrastructure Trust Inc (NYSE:CORR) 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. In this regard RIGL might be a better candidate to consider taking a long position in.
Disclosure: None
