Is Cowen Inc. (NASDAQ:COWN) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is COWN a good stock to buy? Cowen Inc. (NASDAQ:COWN) has experienced a decrease in hedge fund interest of late. Cowen Inc. (NASDAQ:COWN) was in 26 hedge funds’ portfolios at the end of September. The all time high for this statistic is 27. Our calculations also showed that COWN isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind we’re going to take a glance at the recent hedge fund action surrounding Cowen Inc. (NASDAQ:COWN).
John Overdeck of Two Sigma Advisors
Do Hedge Funds Think COWN Is A Good Stock To Buy Now?
At Q3’s end, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -4% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards COWN over the last 25 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Azora Capital held the most valuable stake in Cowen Inc. (NASDAQ:COWN), which was worth $60.4 million at the end of the third quarter. On the second spot was Arbiter Partners Capital Management which amassed $32 million worth of shares. Millennium Management, Two Sigma Advisors, and D E Shaw were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Azora Capital allocated the biggest weight to Cowen Inc. (NASDAQ:COWN), around 7.16% of its 13F portfolio. Arbiter Partners Capital Management is also relatively very bullish on the stock, earmarking 5.08 percent of its 13F equity portfolio to COWN.
Judging by the fact that Cowen Inc. (NASDAQ:COWN) has faced a decline in interest from hedge fund managers, it’s safe to say that there lies a certain “tier” of money managers who were dropping their positions entirely last quarter. At the top of the heap, Renaissance Technologies cut the largest stake of the “upper crust” of funds tracked by Insider Monkey, totaling about $9.3 million in stock, and Seth Fischer’s Oasis Management was right behind this move, as the fund said goodbye to about $1.1 million worth. These moves are interesting, as total hedge fund interest was cut by 1 funds last quarter.
Let’s check out hedge fund activity in other stocks similar to Cowen Inc. (NASDAQ:COWN). We will take a look at BioAtla, Inc. (NASDAQ:BCAB), Origin Bancorp, Inc. (NASDAQ:OBNK), Applied Molecular Transport Inc. (NASDAQ:AMTI), Kaman Corporation (NYSE:KAMN), Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD), Greenidge Generation Holdings Inc. (NASDAQ:GREE), and Cullinan Oncology, Inc. (NASDAQ:CGEM). This group of stocks’ market valuations are similar to COWN’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BCAB | 19 | 259025 | 9 |
| OBNK | 11 | 53662 | -1 |
| AMTI | 8 | 14259 | 5 |
| KAMN | 14 | 157272 | 2 |
| GLDD | 14 | 103751 | -1 |
| GREE | 9 | 24140 | 9 |
| CGEM | 14 | 166624 | -5 |
| Average | 12.7 | 111248 | 2.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.7 hedge funds with bullish positions and the average amount invested in these stocks was $111 million. That figure was $214 million in COWN’s case. BioAtla, Inc. (NASDAQ:BCAB) is the most popular stock in this table. On the other hand Applied Molecular Transport Inc. (NASDAQ:AMTI) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Cowen Inc. (NASDAQ:COWN) is more popular among hedge funds. Our overall hedge fund sentiment score for COWN is 82.9. 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. 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 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. Unfortunately COWN wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on COWN were disappointed as the stock returned 4.2% since the end of the third quarter (through 12/9) 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 since 2019.
Follow Cowen Inc. (NASDAQ:COWN)
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Disclosure: None. This article was originally published at Insider Monkey.
