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 817 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 Criteo SA (NASDAQ:CRTO) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is CRTO a good stock to buy now? Criteo SA (NASDAQ:CRTO) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 11 hedge funds’ portfolios at the end of September. Our calculations also showed that CRTO isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). At the end of this article we will also compare CRTO to other stocks including PAR Technology Corporation (NYSE:PAR), Guess’, Inc. (NYSE:GES), and Antero Resources Corp (NYSE:AR) to get a better sense of its popularity.
Video: 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 a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 percentage points since March 2017 (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 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Ahmet Okumus of Okumus Fund Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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. Now let’s take a gander at the latest hedge fund action surrounding Criteo SA (NASDAQ:CRTO).
Do Hedge Funds Think CRTO Is A Good Stock To Buy Now?
At Q3’s end, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CRTO over the last 21 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Okumus Fund Management, managed by Ahmet Okumus, holds the most valuable position in Criteo SA (NASDAQ:CRTO). Okumus Fund Management has a $25.1 million position in the stock, comprising 35.7% of its 13F portfolio. The second largest stake is held by Tenzing Global Investors, managed by Chet Kapoor, which holds a $8.5 million position; 3.8% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions comprise Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, D. E. Shaw’s D E Shaw and Charles de Vaulx’s International Value Advisers. In terms of the portfolio weights assigned to each position Okumus Fund Management allocated the biggest weight to Criteo SA (NASDAQ:CRTO), around 35.67% of its 13F portfolio. Tenzing Global Investors is also relatively very bullish on the stock, dishing out 3.82 percent of its 13F equity portfolio to CRTO.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Black-and-White Capital. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Citadel Investment Group).
Let’s now take a look at hedge fund activity in other stocks similar to Criteo SA (NASDAQ:CRTO). We will take a look at PAR Technology Corporation (NYSE:PAR), Guess’, Inc. (NYSE:GES), Antero Resources Corp (NYSE:AR), Rosetta Stone Inc (NYSE:RST), Axcelis Technologies Inc (NASDAQ:ACLS), and China Yuchai International Limited (NYSE:CYD). This group of stocks’ market values match CRTO’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PAR | 12 | 281827 | 2 |
| GES | 17 | 51014 | -1 |
| AR | 21 | 203978 | 0 |
| RST | 26 | 191347 | 5 |
| CMRE | 13 | 32878 | 0 |
| ACLS | 20 | 88812 | 0 |
| CYD | 10 | 80331 | 3 |
| Average | 17 | 132884 | 1.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $133 million. That figure was $59 million in CRTO’s case. Rosetta Stone Inc (NYSE:RST) is the most popular stock in this table. On the other hand China Yuchai International Limited (NYSE:CYD) is the least popular one with only 10 bullish hedge fund positions. Criteo SA (NASDAQ:CRTO) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CRTO is 24.6. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on CRTO as the stock returned 54.7% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
