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 have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider CorVel Corporation (NASDAQ:CRVL) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
CorVel Corporation (NASDAQ:CRVL) has seen a decrease in hedge fund interest in recent months. CRVL was in 14 hedge funds’ portfolios at the end of the third quarter of 2019. There were 15 hedge funds in our database with CRVL positions at the end of the previous quarter. Our calculations also showed that CRVL isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.8% through November 21, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
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. Let’s view the recent hedge fund action surrounding CorVel Corporation (NASDAQ:CRVL).
Hedge fund activity in CorVel Corporation (NASDAQ:CRVL)
Heading into the fourth quarter of 2019, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -7% from the second quarter of 2019. By comparison, 11 hedge funds held shares or bullish call options in CRVL a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Renaissance Technologies has the number one position in CorVel Corporation (NASDAQ:CRVL), worth close to $100.9 million, comprising 0.1% of its total 13F portfolio. The second largest stake is held by AQR Capital Management, managed by Cliff Asness, which holds a $12.6 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other peers that are bullish contain Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Noam Gottesman’s GLG Partners and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Zebra Capital Management allocated the biggest weight to CorVel Corporation (NASDAQ:CRVL), around 0.5% of its 13F portfolio. Ancora Advisors is also relatively very bullish on the stock, dishing out 0.16 percent of its 13F equity portfolio to CRVL.
Seeing as CorVel Corporation (NASDAQ:CRVL) has experienced falling interest from the entirety of the hedge funds we track, it’s easy to see that there exists a select few money managers that decided to sell off their entire stakes by the end of the third quarter. It’s worth mentioning that Peter Algert and Kevin Coldiron’s Algert Coldiron Investors cut the largest position of the “upper crust” of funds tracked by Insider Monkey, comprising about $0.3 million in stock, and Steve Cohen’s Point72 Asset Management was right behind this move, as the fund sold off about $0 million worth. These moves are important to note, as aggregate hedge fund interest was cut by 1 funds by the end of the third quarter.
Let’s now review hedge fund activity in other stocks similar to CorVel Corporation (NASDAQ:CRVL). These stocks are FormFactor, Inc. (NASDAQ:FORM), Rush Enterprises, Inc. (NASDAQ:RUSHA), GCP Applied Technologies Inc. (NYSE:GCP), and Rent-A-Center Inc (NASDAQ:RCII). This group of stocks’ market caps resemble CRVL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FORM | 19 | 68794 | 5 |
| RUSHA | 20 | 63597 | 0 |
| GCP | 21 | 341720 | -2 |
| RCII | 28 | 382437 | 10 |
| Average | 22 | 214137 | 3.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $214 million. That figure was $140 million in CRVL’s case. Rent-A-Center Inc (NASDAQ:RCII) is the most popular stock in this table. On the other hand FormFactor, Inc. (NASDAQ:FORM) is the least popular one with only 19 bullish hedge fund positions. Compared to these stocks CorVel Corporation (NASDAQ:CRVL) is even less popular than FORM. 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. A small number of hedge funds were also right about betting on CRVL, though not to the same extent, as the stock returned 9% during the fourth quarter (through 11/30) and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
