With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter. One of these stocks was Cascade Bancorp (NASDAQ:CACB).
Is Cascade Bancorp (NASDAQ:CACB) a great investment right now? Money managers are turning less bullish. The number of long hedge fund bets fell by 1 recently, which could a little surprising as the shares of the company were up 4.44% during the third quarter. Cascade Bancorp (NASDAQ:CACB) was in 6 hedge funds’ portfolios at the end of the third quarter of 2015. There were 7 hedge funds in our database with Cascade Bancorp (NASDAQ:CACB) holdings at the end of the previous quarter. Our team decided to take a sneak peek into the hedge fund action surrounding the stock.
For an in-depth understanding of the hedge fund outlook, we will also compare Cascade Bancorp (NASDAQ:CACB) to other stocks including FormFactor, Inc. (NASDAQ:FORM), Rudolph Technologies Inc (NYSE:RTEC), and Peoples Bancorp Inc. (NASDAQ:PEBO) to get a better sense of its popularity.
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In the 21st century investor’s toolkit, there are numerous methods stock traders have at their disposal to assess their stock investments. A pair of the most under-the-radar methods are hedge fund and insider trading signals. We have shown that, historically, those who follow the top picks of the top hedge fund managers can outpace the broader indices by a significant amount (see the details here).
Keeping this in mind, let’s take a peek at the recent action regarding Cascade Bancorp (NASDAQ:CACB).
What have hedge funds been doing with Cascade Bancorp (NASDAQ:CACB)?
At the end of September, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a drop of 14% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Wilbur Ross’ Invesco Private Capital (WL Ross) has the biggest position in Cascade Bancorp (NASDAQ:CACB), worth close to $62 million, comprising 12.9% of its total 13F portfolio. The second largest stake is held by Matthew Lindenbaum of Basswood Capital, with a $16.8 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Some other peers with similar optimism consist of Renaissance Technologies, Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC, and Ken Griffin’s Citadel Investment Group.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Millennium Management. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case here because none of the 700+ hedge funds tracked by Insider Monkey identified Cascade Bancorp (NASDAQ:CACB) as a viable investment and initiated a position in the stock.
Let’s check out hedge fund activity in other stocks similar to Cascade Bancorp (NASDAQ:CACB). We will take a look at FormFactor, Inc. (NASDAQ:FORM), Rudolph Technologies Inc (NYSE:RTEC), Peoples Bancorp Inc. (NASDAQ:PEBO), and JA Solar Holdings Co., Ltd. (ADR) (NASDAQ:JASO). This group of stocks’ market valuations match Cascade Bancorp (NASDAQ:CACB)’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FORM | 18 | 34224 | 1 |
| RTEC | 19 | 46402 | 8 |
| PEBO | 6 | 21262 | -2 |
| JASO | 5 | 16392 | -4 |
As you can see, these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $30 million. That figure was $83 million in Cascade Bancorp (NASDAQ:CACB)’s case. Rudolph Technologies Inc (NYSE:RTEC) is the most popular stock in this table. On the other hand, JA Solar Holdings Co., Ltd. (ADR) (NASDAQ:JASO) is the least popular one with only 5 bullish hedge fund positions. Cascade Bancorp (NASDAQ:CACB) 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, Rudolph Technologies Inc (NYSE:RTEC) might be a better candidate to consider a long position.
