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Has the Time Come to Get Out of Civeo Corporation (Canada) (CVEO)?

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Looking for high-potential stocks? Just follow the big players within the hedge fund industry. Why should you do so? Let’s take a brief look at what statistics have to say about hedge funds’ stock picking abilities to illustrate. The Standard and Poor’s 500 Index returned approximately 7.6% in the 12 months ending November 21, with more than 51% of the stocks in the index failing to beat the benchmark. Therefore, the odds that one will pin down a winner by randomly picking a stock are less than the odds in a fair coin-tossing game. Conversely, best performing hedge funds’ 30 preferred mid-cap stocks generated a return of 18% during the same 12-month period. Coincidence? It might happen to be so, but it is unlikely. Our research covering a 17-year period indicates that hedge funds’ stock picks generate superior risk-adjusted returns. That’s why we believe it is wise to check hedge fund activity before you invest your time or your savings on a stock like Civeo Corporation (Canada) (NYSE:CVEO).

Is Civeo Corporation (Canada) (NYSE:CVEO) a first-rate investment at the moment? The best stock pickers are absolutely selling. The number of bullish hedge fund bets were cut by 4 recently. At the end of this article we will also compare CVEO to other stocks including Dicerna Pharmaceuticals Inc (NASDAQ:DRNA), Assembly Biosciences Inc (NASDAQ:ASMB), and The McClatchy Company (NYSE:MNI) to get a better sense of its popularity.

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We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.

 Production Perig/Shutterstock.com

Production Perig/Shutterstock.com

What have hedge funds been doing with Civeo Corporation (Canada) (NYSE:CVEO)?

At the end of the third quarter, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 27% drop from one quarter earlier, after three quarters of unchanged ownership, which is a worrisome signal. The graph below displays the number of hedge funds with bullish position in CVEO over the last 5 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

CVEO Chart

When looking at the institutional investors followed by Insider Monkey, Centerbridge Partners, led by Mark T. Gallogly, holds the largest position in Civeo Corporation (Canada) (NYSE:CVEO). Centerbridge Partners has a $10.1 million position in the stock. The second most bullish fund manager is Renaissance Technologies, one of the largest hedge funds in the world, with a $7.2 million position. Some other hedge funds and institutional investors that are bullish consist of Phil Frohlich’s Prescott Group Capital Management, Bruce J. Richards and Louis Hanover’s Marathon Asset Management, and Douglas Dethy’s DC Capital Partners. 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.

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