It seems that the masses and most of the financial media hate hedge funds and what they do, but why is this hatred of hedge funds so prominent? At the end of the day, these asset management firms do not gamble the hard-earned money of the people who are on the edge of poverty. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. The S&P 500 Index gained 7.6% in the 12 month-period that ended November 21, while less than 49% of its stocks beat the benchmark. In contrast, the 30 most popular mid-cap stocks among the top hedge fund investors tracked by the Insider Monkey team returned 18% over the same period, which provides evidence that these money managers do have great stock picking abilities. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Century Communities, Inc (NYSE:CCS) .
Century Communities, Inc (NYSE:CCS) was in 13 hedge funds’ portfolios at the end of the third quarter of 2016. CCS has experienced an increase in activity from the world’s largest hedge funds lately. There were 12 hedge funds in our database with CCS holdings at the end of the previous quarter. 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 Xactly Corp (NYSE:XTLY), Collegium Pharmaceutical Inc (NASDAQ:COLL), and 21Vianet Group Inc (NASDAQ:VNET) to gather more data points.
Follow Century Communities Inc. (NYSE:CCS)
Follow Century Communities Inc. (NYSE:CCS)
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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Now, let’s view the fresh action encompassing Century Communities, Inc (NYSE:CCS).
What have hedge funds been doing with Century Communities, Inc (NYSE:CCS)?
At the end of the third quarter, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 8% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CCS over the last 5 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Oaktree Capital Management, led by billionaire Howard Marks, holds the number one position in Century Communities, Inc (NYSE:CCS). Oaktree Capital Management has a $31.6 million position in the stock, comprising 0.4% of its 13F portfolio. On Oaktree Capital Management’s heels is Billings Capital Management, led by Eric F. Billings, holding a $10.5 million position; the fund has 7.9% of its 13F portfolio invested in the stock. Remaining professional money managers with similar optimism contain Eric Sprott’s Sprott Asset Management, Matthew Lindenbaum’s Basswood Capital and Ken Heebner’s Capital Growth Management. We should note that two of these hedge funds (Billings Capital Management and Sprott Asset Management) 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.
As industrywide interest jumped, key money managers were breaking ground themselves. Millennium Management, one of the 10 largest hedge funds in the world, established the biggest position in Century Communities, Inc (NYSE:CCS). Millennium Management had $2.3 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $0.8 million investment in the stock during the quarter.
Let’s also examine hedge fund activity in other stocks similar to Century Communities, Inc (NYSE:CCS). We will take a look at Xactly Corp (NYSE:XTLY), Collegium Pharmaceutical Inc (NASDAQ:COLL), 21Vianet Group Inc (NASDAQ:VNET), and Del Taco Restaurants Inc (NASDAQ:TACO). This group of stocks’ market values are closest to CCS’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| XTLY | 13 | 38377 | 1 |
| COLL | 10 | 140212 | -2 |
| VNET | 9 | 5413 | -2 |
| TACO | 15 | 79942 | 1 |
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 $66 million. That figure was $77 million in CCS’s case. Del Taco Restaurants Inc (NASDAQ:TACO) is the most popular stock in this table. On the other hand 21Vianet Group Inc (NASDAQ:VNET) is the least popular one with only 9 bullish hedge fund positions. Century Communities, Inc (NYSE:CCS) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard TACO might be a better candidate to consider taking a long position in.
Disclosure: none
