Should You Buy CBIZ, Inc. (CBZ)?

The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge funds have been producing disappointing net returns in recent years, however that was partly due to the poor performance of small-cap stocks in general. Well, small-cap stocks finally turned the corner and have been beating the large-cap stocks by more than 10 percentage points over the last 5 months.This means the relevancy of hedge funds’ public filings became inarguable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards CBIZ, Inc. (NYSE:CBZ) .

Is CBIZ, Inc. (NYSE:CBZ) going to take off soon? Investors who are in the know are taking a bullish view. The number of bullish hedge fund investments rose by 4 lately. CBZ was in 18 hedge funds’ portfolios at the end of September. There were 14 hedge funds in our database with CBZ positions at the end of the previous quarter. At the end of this article we will also compare CBZ to other stocks including Oclaro, Inc. (NASDAQ:OCLR), Chase Corporation (NYSEAMEX:CCF), and Applied Micro Circuits Corporation (NASDAQ:AMCC) to get a better sense of its popularity.

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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Hedge fund activity in CBIZ, Inc. (NYSE:CBZ)

At the end of the third quarter, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a rise of 29% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CBZ over the last 5 quarters. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Cardinal Capital, led by Amy Minella, holds the largest position in CBIZ, Inc. (NYSE:CBZ). Cardinal Capital has a $32.1 million position in the stock, comprising 1.5% of its 13F portfolio. The second most bullish fund manager is Gregg J. Powers of Private Capital Management, with a $6.8 million position; 1% of its 13F portfolio is allocated to the stock. Some other peers that are bullish contain D. E. Shaw’s D E Shaw, Claus Moller’s P2 Capital Partners and Jim Simons’ Renaissance Technologies. We should note that none of these hedge funds 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 aggregate interest increased, key hedge funds have jumped into CBIZ, Inc. (NYSE:CBZ) headfirst. GRT Capital Partners, led by Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk, established the most valuable position in CBIZ, Inc. (NYSE:CBZ). GRT Capital Partners had $0.3 million invested in the company at the end of the quarter. Peter Muller’s PDT Partners also made a $0.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Neil Chriss’ Hutchin Hill Capital and Glenn Russell Dubin’s Highbridge Capital Management.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as CBIZ, Inc. (NYSE:CBZ) but similarly valued. These stocks are Oclaro, Inc. (NASDAQ:OCLR), Chase Corporation (NYSEAMEX:CCF), Applied Micro Circuits Corporation (NASDAQ:AMCC), and CalAmp Corp. (NASDAQ:CAMP). This group of stocks’ market valuations resemble CBZ’s market valuation.

As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $105 million. That figure was $69 million in CBZ’s case. Oclaro, Inc. (NASDAQ:OCLR) is the most popular stock in this table. On the other hand Chase Corporation (NYSEAMEX:CCF) is the least popular one with only 8 bullish hedge fund positions. CBIZ, Inc. (NYSE:CBZ) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard OCLR might be a better candidate to consider taking a long position in.

Disclosure: None