The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 866 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article we look at what those investors think of Citizens, Inc. (NYSE:CIA).
Is CIA a good stock to buy? Citizens, Inc. (NYSE:CIA) was in 5 hedge funds’ portfolios at the end of March. The all time high for this statistic is 6. CIA shareholders have witnessed an increase in support from the world’s most elite money managers in recent months. There were 3 hedge funds in our database with CIA positions at the end of the fourth quarter. Our calculations also showed that CIA isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Peter Rathjens of Arrowstreet Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $23 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s review the recent hedge fund action surrounding Citizens, Inc. (NYSE:CIA).
Do Hedge Funds Think CIA Is A Good Stock To Buy Now?
At Q1’s end, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 67% from the previous quarter. On the other hand, there were a total of 3 hedge funds with a bullish position in CIA a year ago. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
The largest stake in Citizens, Inc. (NYSE:CIA) was held by Renaissance Technologies, which reported holding $1.6 million worth of stock at the end of December. It was followed by Citadel Investment Group with a $0.1 million position. Other investors bullish on the company included Two Sigma Advisors, Arrowstreet Capital, and PDT Partners. In terms of the portfolio weights assigned to each position PDT Partners allocated the biggest weight to Citizens, Inc. (NYSE:CIA), around 0.0045% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, designating 0.002 percent of its 13F equity portfolio to CIA.
As one would reasonably expect, key hedge funds were breaking ground themselves. Citadel Investment Group, managed by Ken Griffin, established the largest position in Citizens, Inc. (NYSE:CIA). Citadel Investment Group had $0.1 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also initiated a $0.1 million position during the quarter. The only other fund with a brand new CIA position is Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Let’s also examine hedge fund activity in other stocks similar to Citizens, Inc. (NYSE:CIA). We will take a look at VIA optronics AG (NYSE:VIAO), EyePoint Pharmaceuticals, Inc. (NASDAQ:EYPT), BRT Apartments Corp (NYSE:BRT), Nisun International Enterprise Development Group Co., Ltd (NASDAQ:NISN), Tiptree Inc. (NASDAQ:TIPT), Orphazyme A/S (NASDAQ:ORPH), and Precision Drilling Corp (NYSE:PDS). All of these stocks’ market caps are closest to CIA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VIAO | 8 | 23533 | -2 |
| EYPT | 17 | 82204 | 12 |
| BRT | 3 | 12353 | -1 |
| NISN | 2 | 3176 | 1 |
| TIPT | 4 | 4995 | 0 |
| ORPH | 3 | 2309 | 1 |
| PDS | 6 | 25038 | 0 |
| Average | 6.1 | 21944 | 1.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.1 hedge funds with bullish positions and the average amount invested in these stocks was $22 million. That figure was $2 million in CIA’s case. EyePoint Pharmaceuticals, Inc. (NASDAQ:EYPT) is the most popular stock in this table. On the other hand Nisun International Enterprise Development Group Co., Ltd (NASDAQ:NISN) is the least popular one with only 2 bullish hedge fund positions. Citizens, Inc. (NYSE:CIA) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CIA is 42. 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. 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 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 17.4% in 2021 through June 18th and surpassed the market again by 6.1 percentage points. Unfortunately CIA wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); CIA investors were disappointed as the stock returned -11.6% since the end of March (through 6/18) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
Follow Citizens Inc. (NYSE:CIA)
Follow Citizens Inc. (NYSE:CIA)
Disclosure: None. This article was originally published at Insider Monkey.
