Hedge Funds Are Crazy About CIRCOR International, Inc. (CIR)

Is CIRCOR International, Inc. (NYSE:CIR) a good equity to bet on right now? We like to check what the smart money thinks first before doing extensive research. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to find the latest market-moving information.

CIRCOR International, Inc. (NYSE:CIR) shareholders have witnessed an increase in enthusiasm from smart money recently. It might come as a surprise, considering a drop of 26.43% in the stock value of CIRCOR International, Inc. (NYSE:CIR), during the last quarter. Such hedge fund behavior prompted us to find out more about hedgies that held positions in CIRCOR International, Inc. (NYSE:CIR), at the end of September.

One of the best ways to understand hedge fund sentiment towards a stock is to study the behavior of hedgies towards stocks with similar market caps. At the end of this article, we will also compare CIRCOR International, Inc. (NYSE:CIR) to other stocks, including Transocean Partners LLC (NYSE:RIGP), The Pep Boys – Manny, Moe & Jack (NYSE:PBY), and Independent Bank Group Inc (NASDAQ:IBTX) to get a better sense of its popularity.

In the financial world, there are several methods shareholders have at their disposal to appraise stocks. Some of the best methods are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the best picks of the elite investment managers can outpace the broader indices by a healthy margin (see the details here).

Now, we’re going to go over the key action surrounding CIRCOR International, Inc. (NYSE:CIR).

How have hedgies been trading CIRCOR International, Inc. (NYSE:CIR)?

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, an increase of 22% from the second quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund and institutional investor database, Chuck Royce’s Royce & Associates has the number one position in CIRCOR International, Inc. (NYSE:CIR), worth close to $73.8 million, corresponding to 0.4% of its total 13F portfolio. The second largest stake is held by GAMCO Investors, managed by Mario Gabelli, which holds a $63 million position; 0.4% of its 13F portfolio is allocated to the stock. Remaining professional money managers that hold long positions contain Legg Mason Capital Management, Martin Whitman’s Third Avenue Management, and Renaissance Technologies.

As aggregate interest increased, specific money managers have jumped into CIRCOR International, Inc. (NYSE:CIR) headfirst. Millennium Management, managed by Israel Englander, initiated the biggest position in CIRCOR International, Inc. (NYSE:CIR). Millennium Management had $1.9 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $1.4 million position during the quarter. The other funds with brand new CIRCOR International, Inc. (NYSE:CIR) positions are Chao Ku’s Nine Chapters Capital Management, and Ken Gray and Steve Walsh’s Bryn Mawr Capital.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as CIRCOR International, Inc. (NYSE:CIR) but similarly valued. These stocks are Transocean Partners LLC (NYSE:RIGP), The Pep Boys – Manny, Moe & Jack (NYSE:PBY), Independent Bank Group Inc (NASDAQ:IBTX), and Central Pacific Financial Corp. (NYSE:CPF). This group of stocks’ market values are similar to CIRCOR International, Inc. (NYSE:CIR)’s market value.

As you can see, these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $77 million. That figure was $155 million in CIRCOR International, Inc. (NYSE:CIR)’s case. The Pep Boys – Manny, Moe & Jack (NYSE:PBY) is the most popular stock in this table. On the other hand, Transocean Partners LLC (NYSE:RIGP) is the least popular one with only 7 bullish hedge fund positions. CIRCOR International, Inc. (NYSE:CIR) 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, Pep Boys – Manny, Moe & Jack (NYSE:PBY) might be a better candidate to consider a long position.