Is CACI International Inc (CACI) A Good Stock To Buy?

At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.

Hedge fund interest in CACI International Inc (NYSE:CACI) shares was flat during the third quarter. This is usually a negative indicator. 15 hedge funds that we track owned the stock on September 30, same as on June 30. 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 HB Fuller Co (NYSE:FUL), Copa Holdings, S.A. (NYSE:CPA), and U.S. Silica Holdings Inc (NYSE:SLCA) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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How are hedge funds trading CACI International Inc (NYSE:CACI)?

At the end of the third quarter, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, unchanged from one quarter earlier. The graph below displays the number of hedge funds with a bullish position in CACI over the last 5 quarters, which has remained in a narrow range. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Ken Griffin’s Citadel Investment Group has the biggest position in CACI International Inc (NYSE:CACI), worth close to $12.8 million. Coming in second is Phill Gross and Robert Atchinson of Adage Capital Management, with a $12.2 million position. Some other hedge funds and institutional investors that are bullish consist of Principal Global Investors’ Columbus Circle Investors, Israel Englander’s Millennium Management, and Jim Simons’ Renaissance Technologies. 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.

Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that got rid of their entire stakes in the stock during the third quarter. Intriguingly, Matthew Hulsizer’s PEAK6 Capital Management got rid of the largest stake of all the investors tracked by Insider Monkey, comprising about $1 million in call options, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund said goodbye to about $0.9 million worth of shares.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as CACI International Inc (NYSE:CACI) but similarly valued. We will take a look at HB Fuller Co (NYSE:FUL), Copa Holdings, S.A. (NYSE:CPA), U.S. Silica Holdings Inc (NYSE:SLCA), and Cousins Properties Inc (NYSE:CUZ). This group of stocks’ market valuations are closest to CACI’s market valuation.

As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $285 million. That figure was $62 million in CACI’s case. U.S. Silica Holdings Inc (NYSE:SLCA) is the most popular stock in this table. On the other hand Cousins Properties Inc (NYSE:CUZ) is the least popular one with only 9 bullish hedge fund positions. CACI International Inc (NYSE:CACI) 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 SLCA might be a better candidate to consider taking a long position in.

Disclosure: None