Is CalAmp Corp. (CAMP) A Good Stock To Buy?

The elite funds run by legendary investors such as Dan Loeb and David Tepper make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentive to do the research necessary to beat the market. That’s why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at CalAmp Corp. (NASDAQ:CAMP) from the perspective of those elite funds.

Is CalAmp Corp. (NASDAQ:CAMP) a bargain? The best stock pickers are in a pessimistic mood. The number of long hedge fund positions were trimmed by 2 lately. CalAmp Corp. (NASDAQ:CAMP) was in 14 hedge funds’ portfolios at the end of the third quarter of 2015. There were 16 hedge funds in our database with CalAmp Corp. (NASDAQ:CAMP) positions at the end of the previous quarter. The stock market maintained a similar opinion of the stock, which dropped 11.88% during the quarter. In order to find out more about the hedge fund sentiment, we will discuss hedge funds that held positions in CalAmp Corp. (NASDAQ:CAMP), at the end of the last quarter.

One of the options to understand hedge fund behavior towards any stock is to understand their sentiment towards stocks with similar market caps. At the end of this article, we will compare CalAmp Corp. (NASDAQ:CAMP) to other stocks, including Iridium Communications Inc. (NASDAQ:IRDM), Ashford Hospitality Trust, Inc. (NYSE:AHT), and General Cable Corporation (NYSE:BGC) to get a better sense of its popularity.

In the 21st century investor’s toolkit, there are several gauges market participants have at their disposal to grade publicly traded companies. A couple of the most underrated gauges are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the top money managers can outclass the S&P 500 by a healthy margin (see the details here).

With all of this in mind, let’s take a look at the recent action encompassing CalAmp Corp. (NASDAQ:CAMP).

How have hedgies been trading CalAmp Corp. (NASDAQ:CAMP)?

At the end of Q3, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a decline of 13% from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Harvey Partners, managed by Jeffrey Moskowitz, holds the biggest position in CalAmp Corp. (NASDAQ:CAMP). Harvey Partners has a $4.3 million position in the stock, comprising 2.7% of its 13F portfolio. Coming in second is Royce & Associates, managed by Chuck Royce, which holds a $4.2 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Other members of the smart money with similar optimism include Paul Marshall and Ian Wace’s Marshall Wace LLP, Renaissance Technologies, and Israel Englander’s Millennium Management.

Judging by the fact that CalAmp Corp. (NASDAQ:CAMP) has witnessed a falling interest from the aggregate hedge fund industry, it’s easy to see that there exists a select few funds that elected to cut their full holdings heading into Q4. At the top of the heap, Clifford Fox’s Columbus Circle Investors dropped the biggest stake of the “upper crust” of funds tracked by Insider Monkey, totaling about $12 million in call options.. Frank Slattery’s fund, Symmetry Peak Management, also cut its call options., about $1.8 million worth of shares. These bearish behaviors are interesting, as total hedge fund interest was cut by 2 funds heading into Q4.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as CalAmp Corp. (NASDAQ:CAMP) but similarly valued. These stocks are Iridium Communications Inc. (NASDAQ:IRDM), Ashford Hospitality Trust, Inc. (NYSE:AHT), General Cable Corporation (NYSE:BGC), and Viad Corp (NYSE:VVI). This group of stocks’ market caps match CalAmp Corp. (NASDAQ:CAMP)’s market cap.

As you can see, these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $62 million. That figure was $33 million in CalAmp Corp. (NASDAQ:CAMP)’s case. Ashford Hospitality Trust, Inc. (NYSE:AHT) is the most popular stock in this table. On the other hand, Iridium Communications Inc. (NASDAQ:IRDM) is the least popular one with only 12 bullish hedge fund positions. CalAmp Corp. (NASDAQ:CAMP) 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, Ashford Hospitality Trust, Inc. (NYSE:AHT) might be a better candidate to consider a long position.