Is Central Fund of Canada Limited (USA) (CEF) A Good Stock To Buy?

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As one would reasonably expect, specific money managers were breaking ground themselves. Millennium Management established the most outsized position in Central Fund of Canada Limited (USA) (NYSEAMEX:CEF). Millennium Management had $3.2 million invested in the company at the end of the quarter. Springbok Capital also initiated a small position during the quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Central Fund of Canada Limited (USA) (NYSEAMEX:CEF) but similarly valued. These stocks are Verint Systems Inc. (NASDAQ:VRNT), PBF Energy Inc (NYSE:PBF), AllianceBernstein Holding LP (NYSE:AB), and Platform Specialty Products Corp (NYSE:PAH). This group of stocks’ market caps match CEF’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
VRNT 36 331091 3
PBF 27 783666 -5
AB 8 78215 -4
PAH 40 1382497 -11

As you can see these stocks had an average of 27.75 hedge funds with bullish positions and the average amount invested in these stocks was $644 million. That figure was $11 million in CEF’s case. Platform Specialty Products Corp (NYSE:PAH) is the most popular stock in this table. On the other hand AllianceBernstein Holding LP (NYSE:AB) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Central Fund of Canada Limited (USA) (NYSEAMEX:CEF) is even less popular than AB. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

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