Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of ICC Holdings, Inc. (NASDAQ:ICCH).
Hedge fund interest in ICC Holdings, Inc. (NASDAQ:ICCH) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare ICCH to other stocks including Psychemedics Corp. (NASDAQ:PMD), Pacific Drilling SA (NYSE:PACD), and Gulf Resources, Inc. (NASDAQ:GURE) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 72% since March 2017 and outperformed the S&P 500 ETFs by more than 44 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Michael Price of MFP Investors
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. We interview hedge fund managers and ask them about their best ideas. You can watch our latest hedge fund manager interview here and find out the name of the large-cap healthcare stock that Sio Capital’s Michael Castor expects to double. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to take a peek at the key hedge fund action regarding ICC Holdings, Inc. (NASDAQ:ICCH).
What does smart money think about ICC Holdings, Inc. (NASDAQ:ICCH)?
Heading into the second quarter of 2020, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the fourth quarter of 2019. On the other hand, there were a total of 3 hedge funds with a bullish position in ICCH a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
The largest stake in ICC Holdings, Inc. (NASDAQ:ICCH) was held by MFP Investors, which reported holding $0.5 million worth of stock at the end of September. It was followed by Minerva Advisors with a $0.3 million position. The only other hedge fund that is bullish on the company was Arbiter Partners Capital Management.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as ICC Holdings, Inc. (NASDAQ:ICCH) but similarly valued. We will take a look at Psychemedics Corp. (NASDAQ:PMD), Pacific Drilling SA (NYSE:PACD), Gulf Resources, Inc. (NASDAQ:GURE), and SandRidge Energy Inc. (NYSE:SD). This group of stocks’ market values match ICCH’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PMD | 3 | 3437 | -1 |
| PACD | 8 | 22303 | 0 |
| GURE | 1 | 1224 | 0 |
| SD | 12 | 9952 | -2 |
| Average | 6 | 9229 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $9 million. That figure was $1 million in ICCH’s case. SandRidge Energy Inc. (NYSE:SD) is the most popular stock in this table. On the other hand Gulf Resources, Inc. (NASDAQ:GURE) is the least popular one with only 1 bullish hedge fund positions. ICC Holdings, Inc. (NASDAQ:ICCH) 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 7.9% in 2020 through May 22nd and surpassed the market by 15.6 percentage points. Unfortunately ICCH wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); ICCH investors were disappointed as the stock returned -0.2% during the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.
