The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31st. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards cbdMD, Inc. (NYSE:YCBD).
Hedge fund interest in cbdMD, Inc. (NYSE:YCBD) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that YCBD isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). At the end of this article we will also compare YCBD to other stocks including Northeast Bank (NASDAQ:NBN), NewHold Investment Corp. (NASDAQ:NHIC), and Bankwell Financial Group, Inc. (NASDAQ:BWFG) to get a better sense of its popularity.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was 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). So you can still find a lot of gems by following hedge funds’ moves today.
Michael Gelband of ExodusPoint 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 $23 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. Now let’s go over the new hedge fund action regarding cbdMD, Inc. (NYSE:YCBD).
Do Hedge Funds Think YCBD Is A Good Stock To Buy Now?
At Q1’s end, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards YCBD over the last 23 quarters. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of cbdMD, Inc. (NYSE:YCBD), with a stake worth $1.4 million reported as of the end of March. Trailing Renaissance Technologies was Engineers Gate Manager, which amassed a stake valued at $0.3 million. Citadel Investment Group, ExodusPoint Capital, and Citadel Investment Group 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 0 allocated the biggest weight to cbdMD, Inc. (NYSE:YCBD), around 0.02% of its 13F portfolio. 0 is also relatively very bullish on the stock, setting aside 0.0026 percent of its 13F equity portfolio to YCBD.
Seeing as cbdMD, Inc. (NYSE:YCBD) has faced bearish sentiment from the smart money, logic holds that there were a few hedgies who were dropping their full holdings in the first quarter. Interestingly, Israel Englander’s Millennium Management dropped the biggest position of all the hedgies monitored by Insider Monkey, totaling about $0.2 million in stock. David Harding’s fund, Winton Capital Management, also dumped its stock, about $0.1 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks similar to cbdMD, Inc. (NYSE:YCBD). We will take a look at Northeast Bank (NASDAQ:NBN), NewHold Investment Corp. (NASDAQ:NHIC), Bankwell Financial Group, Inc. (NASDAQ:BWFG), Bank of Commerce Holdings (NASDAQ:BOCH), Investar Holding Corporation (NASDAQ:ISTR), TELA Bio, Inc. (NASDAQ:TELA), and Kaixin Auto Holdings (NASDAQ:KXIN). This group of stocks’ market caps are similar to YCBD’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NBN | 5 | 29994 | -1 |
| NHIC | 16 | 62215 | 0 |
| BWFG | 4 | 26574 | -1 |
| BOCH | 3 | 6001 | -1 |
| ISTR | 5 | 20928 | 0 |
| TELA | 9 | 70631 | 1 |
| KXIN | 5 | 490 | 0 |
| Average | 6.7 | 30976 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.7 hedge funds with bullish positions and the average amount invested in these stocks was $31 million. That figure was $2 million in YCBD’s case. NewHold Investment Corp. (NASDAQ:NHIC) is the most popular stock in this table. On the other hand Bank of Commerce Holdings (NASDAQ:BOCH) is the least popular one with only 3 bullish hedge fund positions. cbdMD, Inc. (NYSE:YCBD) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for YCBD is 42.7. 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 17.4% in 2021 through June 18th and surpassed the market again by 6.1 percentage points. Unfortunately YCBD wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); YCBD investors were disappointed as the stock returned -30.4% since the end of March (through 6/18) 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.
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Disclosure: None. This article was originally published at Insider Monkey.
