Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Crane Co. (NYSE:CR) in this article.
Is CR stock a buy? Crane Co. (NYSE:CR) was in 24 hedge funds’ portfolios at the end of December. The all time high for this statistic is 29. CR has experienced a decrease in hedge fund sentiment in recent months. There were 29 hedge funds in our database with CR positions at the end of the third quarter. Our calculations also showed that CR isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 197% since March 2017 and outperformed the S&P 500 ETFs by more than 124 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Peter Rathjens of Arrowstreet Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind we’re going to view the recent hedge fund action regarding Crane Co. (NYSE:CR).
Do Hedge Funds Think CR Is A Good Stock To Buy Now?
At the end of the fourth quarter, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -17% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CR over the last 22 quarters. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
Among these funds, GAMCO Investors held the most valuable stake in Crane Co. (NYSE:CR), which was worth $120.4 million at the end of the fourth quarter. On the second spot was Arrowstreet Capital which amassed $41.5 million worth of shares. Royce & Associates, Two Sigma Advisors, and AQR Capital Management 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 Value Holdings LP allocated the biggest weight to Crane Co. (NYSE:CR), around 1.54% of its 13F portfolio. GAMCO Investors is also relatively very bullish on the stock, designating 1.13 percent of its 13F equity portfolio to CR.
Judging by the fact that Crane Co. (NYSE:CR) has witnessed a decline in interest from the aggregate hedge fund industry, it’s easy to see that there was a specific group of funds who sold off their full holdings last quarter. Interestingly, Israel Englander’s Millennium Management dropped the largest investment of all the hedgies monitored by Insider Monkey, worth close to $11.7 million in stock, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund said goodbye to about $10.4 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 5 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Crane Co. (NYSE:CR). We will take a look at SAGE Therapeutics Inc (NASDAQ:SAGE), ICU Medical, Inc. (NASDAQ:ICUI), MAXIMUS, Inc. (NYSE:MMS), RBC Bearings Incorporated (NASDAQ:ROLL), ACI Worldwide Inc (NASDAQ:ACIW), Nomad Foods Limited (NYSE:NOMD), and Acadia Healthcare Company Inc (NASDAQ:ACHC). All of these stocks’ market caps are similar to CR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SAGE | 29 | 622755 | -5 |
| ICUI | 22 | 359044 | -9 |
| MMS | 24 | 144428 | 2 |
| ROLL | 14 | 48268 | -4 |
| ACIW | 30 | 721729 | 1 |
| NOMD | 28 | 385214 | -3 |
| ACHC | 29 | 517678 | 5 |
| Average | 25.1 | 399874 | -1.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.1 hedge funds with bullish positions and the average amount invested in these stocks was $400 million. That figure was $265 million in CR’s case. ACI Worldwide Inc (NASDAQ:ACIW) is the most popular stock in this table. On the other hand RBC Bearings Incorporated (NASDAQ:ROLL) is the least popular one with only 14 bullish hedge fund positions. Crane Co. (NYSE:CR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CR is 56.1. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and still beat the market by 0.9 percentage points. A small number of hedge funds were also right about betting on CR as the stock returned 20.9% since the end of the fourth quarter (through 4/19) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
