Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Criteo SA (NASDAQ:CRTO) based on that data and determine whether they were really smart about the stock.
Criteo SA (NASDAQ:CRTO) has seen an increase in hedge fund sentiment recently. CRTO was in 13 hedge funds’ portfolios at the end of the first quarter of 2020. There were 10 hedge funds in our database with CRTO positions at the end of the previous quarter. Our calculations also showed that CRTO isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
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 58 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 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, we take a look at lists like the 15 largest gold producing countries to identify emerging companies that are likely to deliver 1000% gains in the coming years. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s take a gander at the fresh hedge fund action encompassing Criteo SA (NASDAQ:CRTO).
What does smart money think about Criteo SA (NASDAQ:CRTO)?
At the end of the first quarter, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 30% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in CRTO over the last 18 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Okumus Fund Management was the largest shareholder of Criteo SA (NASDAQ:CRTO), with a stake worth $22.3 million reported as of the end of September. Trailing Okumus Fund Management was International Value Advisers, which amassed a stake valued at $11.2 million. Citadel Investment Group, D E Shaw, and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Okumus Fund Management allocated the biggest weight to Criteo SA (NASDAQ:CRTO), around 54.59% of its 13F portfolio. Roumell Asset Management is also relatively very bullish on the stock, earmarking 8.99 percent of its 13F equity portfolio to CRTO.
As industrywide interest jumped, some big names were leading the bulls’ herd. Coliseum Capital, managed by Christopher Shackelton and Adam Gray, created the biggest position in Criteo SA (NASDAQ:CRTO). Coliseum Capital had $4.1 million invested in the company at the end of the quarter. Greg Eisner’s Engineers Gate Manager also initiated a $0.2 million position during the quarter. The following funds were also among the new CRTO investors: Noam Gottesman’s GLG Partners and Michael Gelband’s ExodusPoint Capital.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Criteo SA (NASDAQ:CRTO) but similarly valued. These stocks are Allegiance Bancshares, Inc. (NASDAQ:ABTX), Ennis, Inc. (NYSE:EBF), Athersys, Inc. (NASDAQ:ATHX), and Solar Capital Ltd. (NASDAQ:SLRC). This group of stocks’ market values are similar to CRTO’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ABTX | 6 | 6471 | -1 |
| EBF | 9 | 62731 | -2 |
| ATHX | 8 | 3683 | 1 |
| SLRC | 15 | 28444 | -1 |
| Average | 9.5 | 25332 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.5 hedge funds with bullish positions and the average amount invested in these stocks was $25 million. That figure was $64 million in CRTO’s case. Solar Capital Ltd. (NASDAQ:SLRC) is the most popular stock in this table. On the other hand Allegiance Bancshares, Inc. (NASDAQ:ABTX) is the least popular one with only 6 bullish hedge fund positions. Criteo SA (NASDAQ:CRTO) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.3% in 2020 through June 25th but still beat the market by 16.8 percentage points. Hedge funds were also right about betting on CRTO as the stock returned 44.8% in Q2 (through June 25th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
