How do we determine whether Cornerstone Building Brands, Inc. (NYSE:CNR) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
Is Cornerstone Building Brands, Inc. (NYSE:CNR) a buy right now? Prominent investors are turning bullish. The number of long hedge fund positions advanced by 3 recently. Our calculations also showed that CNR isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). CNR was in 18 hedge funds’ portfolios at the end of the third quarter of 2019. There were 15 hedge funds in our database with CNR holdings at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the 21st century investor’s toolkit there are a multitude of indicators stock market investors use to evaluate stocks. A couple of the less known indicators are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the best picks of the best investment managers can beat their index-focused peers by a solid margin (see the details here).
Jim Simons of Renaissance Technologies
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. We’re going to take a glance at the recent hedge fund action encompassing Cornerstone Building Brands, Inc. (NYSE:CNR).
How have hedgies been trading Cornerstone Building Brands, Inc. (NYSE:CNR)?
Heading into the fourth quarter of 2019, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 20% from one quarter earlier. By comparison, 28 hedge funds held shares or bullish call options in CNR a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Cornerstone Building Brands, Inc. (NYSE:CNR) was held by Coliseum Capital, which reported holding $27.2 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $15.3 million position. Other investors bullish on the company included Prescott Group Capital Management, Lonestar Capital Management, and Intrinsic Edge Capital. In terms of the portfolio weights assigned to each position Covalent Capital Partners allocated the biggest weight to Cornerstone Building Brands, Inc. (NYSE:CNR), around 8.32% of its 13F portfolio. Coliseum Capital is also relatively very bullish on the stock, designating 7.62 percent of its 13F equity portfolio to CNR.
With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. Lonestar Capital Management, managed by Jerome L. Simon, initiated the most outsized position in Cornerstone Building Brands, Inc. (NYSE:CNR). Lonestar Capital Management had $9.1 million invested in the company at the end of the quarter. David Brown’s Hawk Ridge Management also made a $4.2 million investment in the stock during the quarter. The following funds were also among the new CNR investors: Steve Pei’s Gratia Capital, Robert Henry Lynch’s Aristeia Capital, and Israel Englander’s Millennium Management.
Let’s now review hedge fund activity in other stocks similar to Cornerstone Building Brands, Inc. (NYSE:CNR). These stocks are Atara Biotherapeutics Inc (NASDAQ:ATRA), Berry Petroleum Corporation (NASDAQ:BRY), Community Trust Bancorp, Inc. (NASDAQ:CTBI), and Anika Therapeutics, Inc. (NASDAQ:ANIK). This group of stocks’ market valuations are similar to CNR’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ATRA | 15 | 357961 | 3 |
| BRY | 18 | 166597 | 0 |
| CTBI | 7 | 17795 | 1 |
| ANIK | 17 | 94464 | 1 |
| Average | 14.25 | 159204 | 1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.25 hedge funds with bullish positions and the average amount invested in these stocks was $159 million. That figure was $85 million in CNR’s case. Berry Petroleum Corporation (NASDAQ:BRY) is the most popular stock in this table. On the other hand Community Trust Bancorp, Inc. (NASDAQ:CTBI) is the least popular one with only 7 bullish hedge fund positions. Cornerstone Building Brands, Inc. (NYSE:CNR) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on CNR as the stock returned 14% during the fourth quarter (through the end of November) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
