Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: Bancolombia SA (ADR) (NYSE:CIB).
Bancolombia SA (ADR) (NYSE:CIB) was in 9 hedge funds’ portfolios at the end of September. CIB investors should be aware of an increase in hedge fund sentiment in recent months. There were 6 hedge funds in our database with CIB positions at the end of the previous quarter. 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 Buckeye Partners, L.P. (NYSE:BPL), Expeditors International of Washington (NASDAQ:EXPD), and Mobileye NV (NYSE:MBLY) to gather more data points.
Follow Bancolombia S A (NYSE:CIB)
Follow Bancolombia S A (NYSE:CIB)
We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.
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Now, we’re going to take a glance at the recent action surrounding Bancolombia SA (ADR) (NYSE:CIB).
What have hedge funds been doing with Bancolombia SA (ADR) (NYSE:CIB)?
At Q3’s end, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 50% from the previous quarter. By comparison, 4 hedge funds held shares or bullish call options in CIB heading into this year. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, GMT Capital, led by Thomas E. Claugus, holds the number one position in Bancolombia SA (ADR) (NYSE:CIB). GMT Capital has a $27.1 million position in the stock, comprising 0.6% of its 13F portfolio. Sitting at the No. 2 spot is Driehaus Capital, led by Richard Driehaus, which holds a $22.4 million position; 0.8% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors that are bullish comprise Renaissance Technologies, one of the largest hedge funds in the world, Paul Marshall and Ian Wace’s Marshall Wace LLP and Israel Englander’s Millennium Management. We should note that none of these hedge funds 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 money managers have jumped into Bancolombia SA (ADR) (NYSE:CIB) headfirst. Driehaus Capital, led by Richard Driehaus, initiated the largest position in Bancolombia SA (ADR) (NYSE:CIB). Driehaus Capital had $22.4 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $6.2 million position during the quarter. The following funds were also among the new CIB investors: Ken Griffin’s Citadel Investment Group and Louis Navellier’s Navellier & Associates.
Let’s also examine hedge fund activity in other stocks similar to Bancolombia SA (ADR) (NYSE:CIB). We will take a look at Buckeye Partners, L.P. (NYSE:BPL), Expeditors International of Washington (NASDAQ:EXPD), Mobileye NV (NYSE:MBLY), and Cna Financial Corp (NYSE:CNA). All of these stocks’ market caps match CIB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BPL | 13 | 67387 | -1 |
| EXPD | 21 | 582053 | 1 |
| MBLY | 30 | 465006 | 5 |
| CNA | 18 | 60275 | -3 |
As you can see these stocks had an average of 20.5 hedge funds with bullish positions and the average amount invested in these stocks was $294 million. That figure was $70 million in CIB’s case. Mobileye NV (NYSE:MBLY) is the most popular stock in this table. On the other hand Buckeye Partners, L.P. (NYSE:BPL) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Bancolombia SA (ADR) (NYSE:CIB) is even less popular than BPL. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
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