At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.
Is Cosan Ltd (USA) (NYSE:CZZ) a marvelous investment today? The smart money is buying. The number of long hedge fund positions advanced by 7 lately. At the end of this article we will also compare CZZ to other stocks including Pattern Energy Group Inc (NASDAQ:PEGI), International Bancshares Corp (NASDAQ:IBOC), and Bitauto Hldg Ltd (ADR) (NYSE:BITA) to get a better sense of its popularity.
Follow Cosan Ltd (NYSE:CZZ)
Follow Cosan Ltd (NYSE:CZZ)
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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How are hedge funds trading Cosan Ltd (USA) (NYSE:CZZ)?
Heading into the fourth quarter of 2016, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a 44% lift from the previous quarter, pushing hedge fund ownership to its highest total in the last year. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Renaissance Technologies, managed by Jim Simons, holds the largest position in Cosan Ltd (USA) (NYSE:CZZ). Renaissance Technologies has a $33.2 million position in the stock. The second largest stake is held by Carlson Capital, managed by Clint Carlson, which holds a $26.9 million position. Some other hedge funds and institutional investors that are bullish contain David Kowitz and Sheldon Kasowitz’s Indus Capital, Israel Englander’s Millennium Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. Adage Capital Management, managed by Phill Gross and Robert Atchinson, established the biggest position in Cosan Ltd (USA) (NYSE:CZZ). Adage Capital Management had $7.2 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $1.4 million position during the quarter. The other funds with brand new CZZ positions are Ken Griffin’s Citadel Investment Group, Chao Ku’s Nine Chapters Capital Management, and Matthew Tewksbury’s Stevens Capital Management.
Let’s now take a look at hedge fund activity in other stocks similar to Cosan Ltd (USA) (NYSE:CZZ). These stocks are Pattern Energy Group Inc (NASDAQ:PEGI), International Bancshares Corp (NASDAQ:IBOC), Bitauto Hldg Ltd (ADR) (NYSE:BITA), and RBC Bearings Incorporated (NASDAQ:ROLL). This group of stocks’ market caps match CZZ’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PEGI | 15 | 164750 | -2 |
| IBOC | 10 | 37911 | -1 |
| BITA | 13 | 116726 | 2 |
| ROLL | 10 | 76697 | 3 |
As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $99 million. That figure was $169 million in CZZ’s case. Pattern Energy Group Inc (NASDAQ:PEGI) is the most popular stock in this table. On the other hand International Bancshares Corp (NASDAQ:IBOC) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Cosan Ltd (USA) (NYSE:CZZ) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers and growing more bullish than ever, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None
