At Insider Monkey, we pore over the filings of more than 700 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not China Ceramics Co Ltd (NASDAQ:CCCL) makes for a good investment right now.
Is China Ceramics Co Ltd a bargain? Prominent investors are becoming less hopeful. The number of bullish hedge fund positions were trimmed by 1 in recent months. CCCL was in 4 hedge funds’ portfolios at the end of September. There were 5 hedge funds in our database with CCCL positions at the end of the previous quarter. At the end of this article we will also compare CCCL to other stocks including Speed Commerce Inc (NASDAQ:SPDC), InspireMD Inc (NYSEMKT:NSPR), and Lincoln Educational Services Corporation (NASDAQ:LINC) to get a better sense of its popularity.
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Now, let’s take a glance at the fresh action surrounding China Ceramics Co Ltd (NASDAQ:CCCL).
What does the smart money think about China Ceramics Co Ltd (NASDAQ:CCCL)?
At Q3’s end, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -20% from the second quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Prescott Group Capital Management, managed by Phil Frohlich, holds the biggest position in China Ceramics Co Ltd (NASDAQ:CCCL). Prescott Group Capital Management has a $1.3 million position in the stock, comprising 0.3% of its 13F portfolio. Coming in second is Dorset Management, led by David M. Knott, holding a $0.3 million position; 0.1% of its 13F portfolio is allocated to the stock. Other professional money managers that are bullish include Jim Simons’s Renaissance Technologies, and Ken Griffin’s Citadel Investment Group .
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Selz Capital. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because none of the 700+ hedge funds tracked by Insider Monkey identified CCCL as a viable investment and initiated a position in the stock.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as China Ceramics Co Ltd (NASDAQ:CCCL) but similarly valued. We will take a look at Speed Commerce Inc (NASDAQ:SPDC), InspireMD Inc (NYSEMKT:NSPR), Lincoln Educational Services Corporation (NASDAQ:LINC), and Forbes Energy Services Ltd. (NASDAQ:FES). This group of stocks’ market valuations resemble CCCL’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SPDC | 6 | 1624 | -2 |
| NSPR | 6 | 1696 | -1 |
| LINC | 6 | 2144 | -1 |
| FES | 4 | 2343 | -1 |
As you can see these stocks had an average of 5.5 hedge funds with bullish positions and the average amount invested in these stocks was $2 million. That figure was $2 million in CCCL’s case. Speed Commerce Inc (NASDAQ:SPDC) is the most popular stock in this table. On the other hand Forbes Energy Services Ltd. (NASDAQ:FES) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks China Ceramics Co Ltd (NASDAQ:CCCL) is as less popular as FES. 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.