Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
Is CorVel Corporation (NASDAQ:CRVL) a buy right now? Money managers are really taking a pessimistic view. The number of long hedge fund bets was slashed by 2 lately. At the end of this article we will also compare CRVL to other stocks including National Storage Affiliates Trust (NYSE:NSA), K2M Group Holdings Inc (NASDAQ:KTWO), and Just Energy Group, Inc. Ordinary Shares (Canada) (NYSE:JE) to get a better sense of its popularity.
Follow Corvel Corp (NASDAQ:CRVL)
Follow Corvel Corp (NASDAQ:CRVL)
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Hedge fund activity in CorVel Corporation (NASDAQ:CRVL)
Heading into the fourth quarter of 2016, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a 15% drop from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards CRVL over the last 5 quarters, which peaked in the middle of 2016. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies, one of the largest hedge funds in the world, holds the biggest position in CorVel Corporation (NASDAQ:CRVL). Renaissance Technologies has a $56.1 million position in the stock. The second largest stake is held by Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holding a $3.4 million position. Some other members of the smart money with similar optimism comprise Israel Englander’s Millennium Management, Ken Griffin’s Citadel Investment Group, and Cliff Asness’ AQR Capital Management. 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 CorVel Corporation (NASDAQ:CRVL) has weathered declining sentiment from the entirety of the hedge funds we track, we can see that there lies a certain “tier” of funds who sold off their positions entirely in the third quarter. It’s worth mentioning that Chuck Royce’s Royce & Associates cut the biggest stake of the “upper crust” of funds watched by Insider Monkey, worth about $1.6 million in stock. Joel Greenblatt’s fund, Gotham Asset Management, also cut its stock, about $0.5 million worth.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as CorVel Corporation (NASDAQ:CRVL) but similarly valued. These stocks are National Storage Affiliates Trust (NYSE:NSA), K2M Group Holdings Inc (NASDAQ:KTWO), Just Energy Group, Inc. Ordinary Shares (Canada) (NYSE:JE), and Viad Corp (NYSE:VVI). This group of stocks’ market valuations are similar to CRVL’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NSA | 12 | 68930 | -9 |
| KTWO | 10 | 50490 | -1 |
| JE | 9 | 15531 | -2 |
| VVI | 14 | 128142 | -1 |
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $66 million. That figure was also $66 million in CRVL’s case. Viad Corp (NYSE:VVI) is the most popular stock in this table. On the other hand Just Energy Group, Inc. Ordinary Shares (Canada) (NYSE:JE) is the least popular one with only 9 bullish hedge fund positions. CorVel Corporation (NASDAQ:CRVL) 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 VVI might be a better candidate to consider taking a long position in.
Disclosure: None
