The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge funds have been producing disappointing net returns in recent years, however that was partly due to the poor performance of small-cap stocks in general. Well, small-cap stocks finally turned the corner and have been beating the large-cap stocks by more than 10 percentage points over the last 5 months.This means the relevancy of hedge funds’ public filings became inarguable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Cogent Communications Group, Inc. (NASDAQ:CCOI).
Cogent Communications Group, Inc. (NASDAQ:CCOI) shares didn’t see a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 16 hedge funds’ portfolios at the end of September, as at the end of June. 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 Houlihan Lokey Inc (NYSE:HLI), OM Asset Management PLC (NYSE:OMAM), and ExlService Holdings, Inc. (NASDAQ:EXLS) 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.
How have hedgies been trading Cogent Communications Group, Inc. (NASDAQ:CCOI)?
At the end of the third quarter, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, unchanged from the second quarter of 2016. There were also a total of 16 hedge funds with a bullish position in CCOI at the beginning of this year, so hedge fund sentiment is also flat in 2016. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Renaissance Technologies, one of the largest hedge funds in the world, holds the largest position in Cogent Communications Group, Inc. (NASDAQ:CCOI). Renaissance Technologies has a $54.4 million position in the stock. Sitting at the No. 2 spot is Rivulet Capital, led by Barry Lebovits and Joshua Kuntz, holding a $19.4 million position; 4% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors that hold long positions contain Beeneet Kothari’s Tekne Capital Management, Joshua Nash’s Ulysses Management, and Francis Cueto’s Asturias Capital. We should note that two of these hedge funds (Rivulet Capital and Ulysses Management) 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.
We already know that not all hedge funds are bullish on the stock and some hedge funds actually sold off their positions entirely. It’s worth mentioning that Drew Cupps’ Cupps Capital Management sold off the biggest position of the “upper crust” of funds studied by Insider Monkey, valued at an estimated $2.5 million in stock. Ken Griffin’s fund, Citadel Investment Group, also sold off its call options, about $0.6 million worth.
Let’s also examine hedge fund activity in other stocks similar to Cogent Communications Group, Inc. (NASDAQ:CCOI). These stocks are Houlihan Lokey Inc (NYSE:HLI), OM Asset Management PLC (NYSE:OMAM), ExlService Holdings, Inc. (NASDAQ:EXLS), and USANA Health Sciences, Inc. (NYSE:USNA). This group of stocks’ market caps match CCOI’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $80 million. That figure was $173 million in CCOI’s case. USANA Health Sciences, Inc. (NYSE:USNA) is the most popular stock in this table. On the other hand ExlService Holdings, Inc. (NASDAQ:EXLS) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Cogent Communications Group, Inc. (NASDAQ:CCOI) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.