In this article we will analyze whether US Concrete Inc (NASDAQ:USCR) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.
US Concrete Inc (NASDAQ:USCR) was in 6 hedge funds’ portfolios at the end of March. The all time high for this statistic is 23. USCR investors should pay attention to a decrease in hedge fund interest of late. There were 8 hedge funds in our database with USCR holdings at the end of December. Our calculations also showed that USCR isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Matthew Hulsizer of PEAK6 Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $24 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. With all of this in mind we’re going to review the recent hedge fund action encompassing US Concrete Inc (NASDAQ:USCR).
Do Hedge Funds Think USCR Is A Good Stock To Buy Now?
At Q1’s end, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -25% from the previous quarter. By comparison, 12 hedge funds held shares or bullish call options in USCR a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in US Concrete Inc (NASDAQ:USCR) was held by Royce & Associates, which reported holding $36.7 million worth of stock at the end of December. It was followed by Citadel Investment Group with a $14 million position. Other investors bullish on the company included PEAK6 Capital Management, Arrowstreet Capital, and PEAK6 Capital Management. In terms of the portfolio weights assigned to each position Royce & Associates allocated the biggest weight to US Concrete Inc (NASDAQ:USCR), around 0.25% of its 13F portfolio. JS Capital is also relatively very bullish on the stock, earmarking 0.04 percent of its 13F equity portfolio to USCR.
Since US Concrete Inc (NASDAQ:USCR) has faced a decline in interest from the aggregate hedge fund industry, it’s easy to see that there was a specific group of fund managers that elected to cut their positions entirely last quarter. Intriguingly, Valerie Malter’s Matarin Capital sold off the largest position of all the hedgies watched by Insider Monkey, totaling about $2.6 million in stock, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund dropped about $2 million worth. These moves are interesting, as total hedge fund interest dropped by 2 funds last quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as US Concrete Inc (NASDAQ:USCR) but similarly valued. We will take a look at Everi Holdings Inc (NYSE:EVRI), Northwest Biotherapeutics, Inc (NASDAQ:NWBO), German American Bancorp., Inc. (NASDAQ:GABC), Employers Holdings, Inc. (NYSE:EIG), Shattuck Labs, Inc. (NASDAQ:STTK), Cambium Networks Corporation (NASDAQ:CMBM), and National Bank Holdings Corp (NYSE:NBHC). This group of stocks’ market caps resemble USCR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EVRI | 24 | 217375 | -5 |
| NWBO | 1 | 1 | 1 |
| GABC | 3 | 21395 | 0 |
| EIG | 11 | 59482 | -2 |
| STTK | 8 | 267436 | -6 |
| CMBM | 10 | 85021 | -5 |
| NBHC | 12 | 68040 | 3 |
| Average | 9.9 | 102679 | -2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.9 hedge funds with bullish positions and the average amount invested in these stocks was $103 million. That figure was $46 million in USCR’s case. Everi Holdings Inc (NYSE:EVRI) is the most popular stock in this table. On the other hand Northwest Biotherapeutics, Inc (NASDAQ:NWBO) is the least popular one with only 1 bullish hedge fund positions. US Concrete Inc (NASDAQ:USCR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for USCR is 21.7. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 19.3% in 2021 through June 25th and surpassed the market again by 4.8 percentage points. Unfortunately USCR wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); USCR investors were disappointed as the stock returned 0.5% since the end of March (through 6/25) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
Follow U.s. Concrete Inc. (NASDAQ:USCR)
Follow U.s. Concrete Inc. (NASDAQ:USCR)
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Disclosure: None. This article was originally published at Insider Monkey.
