Here is What Hedge Funds Think About Cooper-Standard Holdings Inc (CPS)

Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is the small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we follow the hedge fund activity in the small-cap space.

Is Cooper-Standard Holdings Inc (NYSE:CPS) a buy right now? Money managers are actually taking a pessimistic view. The number of long hedge fund bets that are revealed through the 13F filings were trimmed by 2 in recent months. CPSwas in 18 hedge funds’ portfolios at the end of September. There were 20 hedge funds in our database with CPS positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Ascena Retail Group Inc (NASDAQ:ASNA), Forward Air Corporation (NASDAQ:FWRD), and Horace Mann Educators Corporation (NYSE:HMN) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

What does the smart money think about Cooper-Standard Holdings Inc (NYSE:CPS)?

At the end of the third quarter, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a 10% decline from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards CPS 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.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Silver Point Capital, led by Edward A. Mule, holds the biggest position in Cooper-Standard Holdings Inc (NYSE:CPS). Silver Point Capital has a $264.4 million position in the stock, comprising 39.5% of its 13F portfolio. Coming in second is Jim Simons’ Renaissance Technologies, with a $29.7 million position. Other members of the smart money that hold long positions encompass Cliff Asness’ AQR Capital Management, John Overdeck and David Siegel’s Two Sigma Advisors and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. 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.

Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that cut their entire stakes in the stock during the third quarter. At the top of the heap, Peter S. Park’s Park West Asset Management cut the largest stake of all the hedgies tracked by Insider Monkey, totaling an estimated $23.2 million in stock, and Lee Ainslie’s Maverick Capital was right behind this move, as the fund dropped about $2.9 million worth of shares.

Let’s also examine hedge fund activity in other stocks similar to Cooper-Standard Holdings Inc (NYSE:CPS). We will take a look at Ascena Retail Group Inc (NASDAQ:ASNA), Forward Air Corporation (NASDAQ:FWRD), Horace Mann Educators Corporation (NYSE:HMN), and Noah Holdings Limited (ADR) (NYSE:NOAH). All of these stocks’ market caps resemble CPS’s market cap.

As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $101 million. That figure was $369 million in CPS’s case. Ascena Retail Group Inc (NASDAQ:ASNA) is the most popular stock in this table. On the other hand Noah Holdings Limited (ADR) (NYSE:NOAH) is the least popular one with only 8 bullish hedge fund positions. Cooper-Standard Holdings Inc (NYSE:CPS) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ASNA might be a better candidate to consider taking a long position in.

Disclosure: None