At Insider Monkey, we pore over the filings of nearly 866 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of March 31st. In this article, we will use that wealth of knowledge to determine whether or not Cheetah Mobile Inc (NYSE:CMCM) makes for a good investment right now.
Is CMCM stock a buy? Cheetah Mobile Inc (NYSE:CMCM) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 4 hedge funds’ portfolios at the end of the first quarter of 2021. Our calculations also showed that CMCM isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). At the end of this article we will also compare CMCM to other stocks including Utah Medical Products, Inc. (NASDAQ:UTMD), Atento SA (NYSE:ATTO), and Neuronetics, Inc. (NASDAQ:STIM) to get a better sense of its popularity.
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Bruce Kovner of Caxton Associates LP
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Do Hedge Funds Think CMCM Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the fourth quarter of 2020. By comparison, 4 hedge funds held shares or bullish call options in CMCM a year ago. So, let’s examine 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, Renaissance Technologies, holds the most valuable position in Cheetah Mobile Inc (NYSE:CMCM). Renaissance Technologies has a $2.5 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Citadel Investment Group, managed by Ken Griffin, which holds a $0.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other members of the smart money that are bullish contain D. E. Shaw’s D E Shaw, and Bruce Kovner’s Caxton Associates LP. In terms of the portfolio weights assigned to each position Caxton Associates LP allocated the biggest weight to Cheetah Mobile Inc (NYSE:CMCM), around 0.01% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, dishing out 0.0032 percent of its 13F equity portfolio to CMCM.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s go over hedge fund activity in other stocks similar to Cheetah Mobile Inc (NYSE:CMCM). These stocks are Utah Medical Products, Inc. (NASDAQ:UTMD), Atento SA (NYSE:ATTO), Neuronetics, Inc. (NASDAQ:STIM), Ceragon Networks Ltd. (NASDAQ:CRNT), Home Bancorp, Inc. (NASDAQ:HBCP), Coastal Financial Corporation (NASDAQ:CCB), and Commercial Vehicle Group, Inc. (NASDAQ:CVGI). This group of stocks’ market valuations are closest to CMCM’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| UTMD | 4 | 28627 | -2 |
| ATTO | 5 | 128141 | -1 |
| STIM | 19 | 123225 | 4 |
| CRNT | 8 | 25462 | 1 |
| HBCP | 2 | 6478 | -1 |
| CCB | 3 | 25177 | 0 |
| CVGI | 14 | 72822 | -6 |
| Average | 7.9 | 58562 | -0.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.9 hedge funds with bullish positions and the average amount invested in these stocks was $59 million. That figure was $3 million in CMCM’s case. Neuronetics, Inc. (NASDAQ:STIM) is the most popular stock in this table. On the other hand Home Bancorp, Inc. (NASDAQ:HBCP) is the least popular one with only 2 bullish hedge fund positions. Cheetah Mobile Inc (NYSE:CMCM) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CMCM is 25.9. 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 17.2% in 2021 through June 11th and surpassed the market again by 3.3 percentage points. Unfortunately CMCM wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); CMCM investors were disappointed as the stock returned 4% since the end of March (through 6/11) 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 Cheetah Mobile Inc. (NYSE:CMCM)
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Disclosure: None. This article was originally published at Insider Monkey.
