The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge funds have been producing disappointing net returns in recent years, however that was partly due to the poor performance of small-cap stocks in general. Well, small-cap stocks finally turned the corner and have been beating the large-cap stocks by more than 10 percentage points over the last 5 months.This means the relevancy of hedge funds’ public filings became inarguable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Convergys Corporation (NYSE:CVG).
So, is Convergys Corporation (NYSE:CVG) a buy here? It looks like prominent investors are becoming less confident, as the number of bullish hedge fund bets retreated by five between July and September. In this way, 16 funds tracked by Insider Monkey held shares of CVG at the end of September. At the end of this article we will also compare CVG to other stocks including Tootsie Roll Industries, Inc. (NYSE:TR), SouFun Holdings Limited (ADR) (NYSE:SFUN), and BGC Partners, Inc. (NASDAQ:BGCP) to get a better sense of its popularity.
Follow Convergys Corp (NYSE:CVG)
Follow Convergys Corp (NYSE:CVG)
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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Keeping this in mind, let’s take a look at the fresh action regarding Convergys Corporation (NYSE:CVG).
Hedge fund activity in Convergys Corporation (NYSE:CVG)
At the end of the third quarter, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, down by 24% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CVG over the last 5 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Cliff Asness’ AQR Capital Management holds the biggest position in Convergys Corporation (NYSE:CVG), having reported a $63.8 million position in the stock. The second largest stake is held by Amy Minella’s Cardinal Capital holding a $20.5 million position; 1% of its 13F portfolio is allocated to the company. Remaining peers that are bullish comprise David E. Shaw’s D E Shaw, Joel Greenblatt’s Gotham Asset Management, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. We should note that none of these hedge funds 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.
Since Convergys Corporation (NYSE:CVG) has weathered falling interest from hedge fund managers, it’s easy to see that there is a sect of money managers who sold off their positions entirely in the third quarter. Intriguingly, Ken Griffin’s Citadel Investment Group said goodbye to the largest stake of the “upper crust” of funds studied by Insider Monkey, valued at close to $1.8 million in stock. Matthew Tewksbury’s fund, Stevens Capital Management, also dropped its stock valued at about $1.8 million.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Convergys Corporation (NYSE:CVG) but similarly valued. These stocks are Tootsie Roll Industries, Inc. (NYSE:TR), SouFun Holdings Limited (ADR) (NYSE:SFUN), BGC Partners, Inc. (NASDAQ:BGCP), and Summit Materials Inc (NYSE:SUM). This group of stocks’ market caps are similar to CVG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TR | 13 | 93501 | 0 |
| SFUN | 11 | 79709 | -1 |
| BGCP | 18 | 97918 | -2 |
| SUM | 26 | 470924 | 4 |
As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $186 million, versus $141 million in CVG’s case. Summit Materials Inc (NYSE:SUM) is the most popular stock in this table. On the other hand SouFun Holdings Limited (ADR) (NYSE:SFUN) is the least popular one with only 11 bullish hedge fund positions. Convergys Corporation (NYSE:CVG) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard Summit Materials Inc (NYSE:SUM) might be a better candidate to consider taking a long position in.
Disclosure: None
