Is Century Casinos, Inc. (CNTY) A Good Stock To Buy?

Before we spend many hours researching a company, we’d like to analyze what hedge funds and billionaire investors think of the stock first. We would like to do so because the elite investors’ consensus returns have been exceptional. The top 30 S&P 500 stocks among hedge funds at the end of September 2014 yielded an average return of 9.5% during the last 12 months ending in October 30. Sixty three percent of these 30 stocks outperformed the market. Although the elite funds occasionally have their duds, such as Micron and Anadarko Petroleum, which fell 50% and 26%, respectively during the same time period, the hedge fund picks seem to work on average. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Century Casinos, Inc. (NASDAQ:CNTY).

Century Casinos, Inc. (NASDAQ:CNTY) investors should pay attention to an increase in hedge fund interest recently. The increase in hedge fund interest shouldn’t come as a surprise, as the shares of Century Casinos were up 10.03% during the third quarter. Considering the bullish hedge fund sentiment, we decided to cover the hedge funds holding a position Century Casinos, Inc. (NASDAQ:CNTY).

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 J Alexander’s Holdings Inc (NYSE:JAX), and Resource America Inc (NASDAQ:REXI) to gather more data points.

To the average investor, there are a multitude of tools market participants can use to grade stocks. A couple of the less utilized tools are hedge fund and insider trading activity. We have shown that, historically, those who follow the best picks of the best fund managers can outpace the S&P 500 by a very impressive amount (see the details here).

Now, we’re going to take a peek at the new action regarding Century Casinos, Inc. (NASDAQ:CNTY).

What have hedge funds been doing with Century Casinos, Inc. (NASDAQ:CNTY)?

At the end of the third quarter, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 14% from the second quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Chuck Royce’s Royce & Associates has the most valuable position in Century Casinos, Inc. (NASDAQ:CNTY), worth close to $6.4 million, corresponding to less than 0.1% of its total 13F portfolio. On Royce & Associates’s heels is Renaissance Technologies, with a $2.3 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Remaining professional money managers with similar optimism consist of Richard S. Meisenberg’s ACK Asset Management, Andy Redleaf’s Whitebox Advisors, and Mark Coe’s Coe Capital Management.

Now, key money managers have jumped into Century Casinos, Inc. (NASDAQ:CNTY) headfirst. Coe Capital Management assembled the most valuable position in Century Casinos, Inc. (NASDAQ:CNTY). Coe Capital Management had $0.3 million invested in the company at the end of the quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Century Casinos, Inc. (NASDAQ:CNTY) but similarly valued. We will take a look at J Alexander’s Holdings Inc (NYSE:JAX), Resource America Inc (NASDAQ:REXI), and EVINE Live Inc (NASDAQ:EVLV). This group of stocks’ market values are similar to Century Casinos, Inc. (NASDAQ:CNTY)’s market value.

As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was 30 million. That figure was $33 million in Century Casinos, Inc. (NASDAQ:CNTY)’s case. J Alexander’s Holdings Inc (NYSE:JAX) is the most popular stock in this table. Century Casinos, Inc. (NASDAQ:CNTY) 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, J Alexander’s Holdings Inc (NYSE:JAX) might be a better candidate to consider a long position.