Is CMA Stock A Buy or Sell?

Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 900 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Comerica Incorporated (NYSE:CMA).

Is CMA stock a buy or sell? Comerica Incorporated (NYSE:CMA) has seen an increase in activity from the world’s largest hedge funds in recent months. Comerica Incorporated (NYSE:CMA) was in 38 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 49. There were 30 hedge funds in our database with CMA holdings at the end of September. Our calculations also showed that CMA isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

Ryan Tolkin, CIO of Schonfeld Strategic Advisors

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 10 best battery stocks to buy to identify the next stock with 10x upside potential. 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 website. Now we’re going to view the key hedge fund action regarding Comerica Incorporated (NYSE:CMA).

Do Hedge Funds Think CMA Is A Good Stock To Buy Now?

At the end of the fourth quarter, a total of 38 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 27% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CMA over the last 22 quarters. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Adage Capital Management, managed by Phill Gross and Robert Atchinson, holds the biggest position in Comerica Incorporated (NYSE:CMA). Adage Capital Management has a $92.2 million position in the stock, comprising 0.2% of its 13F portfolio. The second largest stake is held by D. E. Shaw of D E Shaw, with a $73.5 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining peers that hold long positions encompass Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Ken Griffin’s Citadel Investment Group and John Overdeck and David Siegel’s Two Sigma Advisors. In terms of the portfolio weights assigned to each position MSDC Management allocated the biggest weight to Comerica Incorporated (NYSE:CMA), around 5.7% of its 13F portfolio. Azora Capital is also relatively very bullish on the stock, earmarking 3.31 percent of its 13F equity portfolio to CMA.

As aggregate interest increased, key hedge funds have been driving this bullishness. Gillson Capital, managed by Daniel Johnson, established the largest position in Comerica Incorporated (NYSE:CMA). Gillson Capital had $16.6 million invested in the company at the end of the quarter. Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors also made a $15 million investment in the stock during the quarter. The other funds with brand new CMA positions are Mark Lee’s Forest Hill Capital, Sander Gerber’s Hudson Bay Capital Management, and Matthew Hulsizer’s PEAK6 Capital Management.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Comerica Incorporated (NYSE:CMA) but similarly valued. These stocks are Lithia Motors Inc (NYSE:LAD), Steel Dynamics, Inc. (NASDAQ:STLD), Regency Centers Corp (NASDAQ:REG), AGCO Corporation (NYSE:AGCO), Acceleron Pharma Inc (NASDAQ:XLRN), Commerce Bancshares, Inc. (NASDAQ:CBSH), and OneConnect Financial Technology Co., Ltd. (NYSE:OCFT). This group of stocks’ market valuations resemble CMA’s market valuation.

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As you can see these stocks had an average of 26.4 hedge funds with bullish positions and the average amount invested in these stocks was $611 million. That figure was $582 million in CMA’s case. AGCO Corporation (NYSE:AGCO) is the most popular stock in this table. On the other hand OneConnect Financial Technology Co., Ltd. (NYSE:OCFT) is the least popular one with only 5 bullish hedge fund positions. Comerica Incorporated (NYSE:CMA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CMA is 80.4. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 5.3% in 2021 through March 19th and still beat the market by 0.8 percentage points. Hedge funds were also right about betting on CMA as the stock returned 25.4% since the end of Q4 (through 3/19) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

Disclosure: None. This article was originally published at Insider Monkey.