Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of December. At Insider Monkey, we follow nearly 750 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Cass Information Systems (NASDAQ:CASS), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is Cass Information Systems (NASDAQ:CASS) a buy right now? Money managers are in a bullish mood. The number of bullish hedge fund bets improved by 1 recently. Our calculations also showed that CASS isn’t among the 30 most popular stocks among hedge funds. CASS was in 8 hedge funds’ portfolios at the end of December. There were 7 hedge funds in our database with CASS holdings at the end of the previous quarter.
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 flagship best performing hedge funds strategy returned 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We’re going to take a look at the recent hedge fund action regarding Cass Information Systems (NASDAQ:CASS).
How have hedgies been trading Cass Information Systems (NASDAQ:CASS)?
At the end of the fourth quarter, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 14% from the second quarter of 2018. By comparison, 7 hedge funds held shares or bullish call options in CASS a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, managed by Jim Simons, holds the most valuable position in Cass Information Systems (NASDAQ:CASS). Renaissance Technologies has a $5 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holding a $4.8 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining members of the smart money that are bullish comprise Chuck Royce’s Royce & Associates, John Overdeck and David Siegel’s Two Sigma Advisors and Ken Griffin’s Citadel Investment Group.
As industrywide interest jumped, key hedge funds were leading the bulls’ herd. D E Shaw, managed by D. E. Shaw, assembled the largest position in Cass Information Systems (NASDAQ:CASS). D E Shaw had $0.3 million invested in the company at the end of the quarter.
Let’s also examine hedge fund activity in other stocks similar to Cass Information Systems (NASDAQ:CASS). We will take a look at Triumph Bancorp Inc (NASDAQ:TBK), Fossil Group Inc (NASDAQ:FOSL), Westlake Chemical Partners LP (NYSE:WLKP), and FTS International, Inc. (NYSE:FTSI). All of these stocks’ market caps are similar to CASS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TBK | 6 | 59631 | -1 |
| FOSL | 18 | 87459 | 0 |
| WLKP | 1 | 1898 | -2 |
| FTSI | 22 | 86133 | 1 |
| Average | 11.75 | 58780 | -0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.75 hedge funds with bullish positions and the average amount invested in these stocks was $59 million. That figure was $15 million in CASS’s case. FTS International, Inc. (NYSE:FTSI) is the most popular stock in this table. On the other hand Westlake Chemical Partners LP (NYSE:WLKP) is the least popular one with only 1 bullish hedge fund positions. Cass Information Systems (NASDAQ:CASS) 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 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately CASS wasn’t nearly as popular as these 15 stock (hedge fund sentiment was quite bearish); CASS investors were disappointed as the stock returned -9.3% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
