There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other successful funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze Cubic Corporation (NYSE:CUB) .
Cubic Corporation (NYSE:CUB) has seen an increase in activity from the world’s largest hedge funds in recent months. CUB was in 17 hedge funds’ portfolios at the end of September. There were 15 hedge funds in our database with CUB holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Franklin Street Properties Corp. (NYSEAMEX:FSP), WesBanco, Inc. (NASDAQ:WSBC), and Shake Shack Inc (NYSE:SHAK) to gather more data points.
Follow Cubic Corp (NYSE:CUB)
Follow Cubic Corp (NYSE:CUB)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Now, let’s take a look at the new action regarding Cubic Corporation (NYSE:CUB).
How have hedgies been trading Cubic Corporation (NYSE:CUB)?
Heading into the fourth quarter of 2016, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, up 13% from the previous quarter. On the other hand, there were a total of 18 hedge funds with a bullish position in CUB at the beginning of this year. So, let’s examine 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, Richard S. Pzena’s Pzena Investment Management holds the most valuable position in Cubic Corporation (NYSE:CUB) which has a $40.7 million position in the stock. Coming in second is Robert Rodriguez and Steven Romick of First Pacific Advisors LLC, with a $24.6 million position. Some other peers with similar optimism consist of Mark Travis’ Intrepid Capital Management, Jim Simons’ Renaissance Technologies and Ken Grossman and Glen Schneider’s SG Capital Management. We should note that two of these hedge funds (Intrepid Capital Management and SG Capital Management) 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.
As one would reasonably expect, some big names have been driving this bullishness. Mark Coe of Coe Capital Management established the biggest position in Cubic Corporation (NYSE:CUB). According to its latest 13F filing, the fund had $0.7 million invested in the company at the end of the quarter. Joel Greenblatt’s Gotham Asset Management also made a $0.6 million investment in the stock during the quarter. The other funds with brand new CUB positions are Mario Gabelli’s GAMCO Investors, Ken Griffin’s Citadel Investment Group, and Mike Vranos’ Ellington.
Let’s go over hedge fund activity in other stocks similar to Cubic Corporation (NYSE:CUB). We will take a look at Franklin Street Properties Corp. (NYSEAMEX:FSP), WesBanco, Inc. (NASDAQ:WSBC), Shake Shack Inc (NYSE:SHAK), and Stratasys, Ltd. (NASDAQ:SSYS). This group of stocks’ market values are closest to CUB’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FSP | 9 | 66144 | -1 |
| WSBC | 7 | 16798 | 1 |
| SHAK | 11 | 85967 | -3 |
| SSYS | 18 | 143762 | 6 |
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 $78 million. That figure was $113 million in CUB’s case. Stratasys, Ltd. (NASDAQ:SSYS) is the most popular stock in this table. On the other hand WesBanco, Inc. (NASDAQ:WSBC) is the least popular one with only 7 bullish hedge fund positions. Cubic Corporation (NYSE:CUB) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SSYS might be a better candidate to consider taking a long position in.
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