In this article we will take a look at whether hedge funds think Century Communities, Inc (NYSE:CCS) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Century Communities, Inc (NYSE:CCS) has experienced a decrease in hedge fund sentiment of late. Century Communities, Inc (NYSE:CCS) was in 21 hedge funds’ portfolios at the end of September. The all time high for this statistic is 25. Our calculations also showed that CCS isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Noam Gottesman of GLG Partners
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now we’re going to review the latest hedge fund action encompassing Century Communities, Inc (NYSE:CCS).
Do Hedge Funds Think CCS Is A Good Stock To Buy Now?
At Q3’s end, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of -16% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CCS over the last 25 quarters. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Matthew Lindenbaum’s Basswood Capital has the biggest position in Century Communities, Inc (NYSE:CCS), worth close to $38.8 million, amounting to 1.6% of its total 13F portfolio. The second largest stake is held by Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which holds a $25.9 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining professional money managers that hold long positions include Dmitry Balyasny’s Balyasny Asset Management, Chuck Royce’s Royce & Associates and George McCabe’s Portolan Capital Management. In terms of the portfolio weights assigned to each position Masterton Capital Management allocated the biggest weight to Century Communities, Inc (NYSE:CCS), around 2.65% of its 13F portfolio. Voss Capital is also relatively very bullish on the stock, setting aside 2.02 percent of its 13F equity portfolio to CCS.
Due to the fact that Century Communities, Inc (NYSE:CCS) has witnessed a decline in interest from the entirety of the hedge funds we track, it’s easy to see that there was a specific group of funds that slashed their full holdings by the end of the third quarter. It’s worth mentioning that Brad Farber’s Atika Capital dumped the largest stake of all the hedgies tracked by Insider Monkey, worth about $8.3 million in stock, and Mark Broach’s Manatuck Hill Partners was right behind this move, as the fund said goodbye to about $6.3 million worth. These transactions are important to note, as total hedge fund interest was cut by 4 funds by the end of the third quarter.
Let’s now review hedge fund activity in other stocks similar to Century Communities, Inc (NYSE:CCS). These stocks are Apollo Commercial Real Est. Finance Inc (NYSE:ARI), BrightSphere Investment Group Inc (NYSE:BSIG), Raven Industries, Inc. (NASDAQ:RAVN), Grocery Outlet Holding Corp. (NASDAQ:GO), Myovant Sciences Ltd. (NYSE:MYOV), Zuora, Inc. (NYSE:ZUO), and SmileDirectClub, Inc. (NASDAQ:SDC). This group of stocks’ market values resemble CCS’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ARI | 7 | 7466 | -2 |
| BSIG | 30 | 904496 | 1 |
| RAVN | 17 | 315196 | -5 |
| GO | 19 | 78826 | 6 |
| MYOV | 13 | 40733 | -5 |
| ZUO | 23 | 190078 | -4 |
| SDC | 18 | 58711 | -1 |
| Average | 18.1 | 227929 | -1.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.1 hedge funds with bullish positions and the average amount invested in these stocks was $228 million. That figure was $121 million in CCS’s case. BrightSphere Investment Group Inc (NYSE:BSIG) is the most popular stock in this table. On the other hand Apollo Commercial Real Est. Finance Inc (NYSE:ARI) is the least popular one with only 7 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. Our overall hedge fund sentiment score for CCS is 56.6. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and still beat the market by 3.6 percentage points. Hedge funds were also right about betting on CCS as the stock returned 33.4% since the end of Q3 (through 12/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
