In this article we will check out the progression of hedge fund sentiment towards Concrete Pumping Holdings, Inc. (NASDAQ:BBCP) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Is Concrete Pumping Holdings, Inc. (NASDAQ:BBCP) ready to rally soon? Investors who are in the know are becoming hopeful. The number of long hedge fund positions went up by 2 in recent months. Our calculations also showed that BBCP isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). BBCP was in 8 hedge funds’ portfolios at the end of March. There were 6 hedge funds in our database with BBCP positions at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to take a look at the key hedge fund action encompassing Concrete Pumping Holdings, Inc. (NASDAQ:BBCP).
What does smart money think about Concrete Pumping Holdings, Inc. (NASDAQ:BBCP)?
Heading into the second quarter of 2020, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 33% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in BBCP over the last 18 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
The largest stake in Concrete Pumping Holdings, Inc. (NASDAQ:BBCP) was held by ACK Asset Management, which reported holding $18.6 million worth of stock at the end of September. It was followed by Owl Creek Asset Management with a $13.1 million position. Other investors bullish on the company included Mountain Lake Investment Management, Millennium Management, and Royce & Associates. In terms of the portfolio weights assigned to each position ACK Asset Management allocated the biggest weight to Concrete Pumping Holdings, Inc. (NASDAQ:BBCP), around 9.28% of its 13F portfolio. Mountain Lake Investment Management is also relatively very bullish on the stock, setting aside 1.35 percent of its 13F equity portfolio to BBCP.
As aggregate interest increased, key money managers have been driving this bullishness. Millennium Management, managed by Israel Englander, established the largest position in Concrete Pumping Holdings, Inc. (NASDAQ:BBCP). Millennium Management had $0.8 million invested in the company at the end of the quarter. Jay Petschek and Steven Major’s Corsair Capital Management also made a $0.1 million investment in the stock during the quarter. The only other fund with a new position in the stock is Ken Griffin’s Citadel Investment Group.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Concrete Pumping Holdings, Inc. (NASDAQ:BBCP) but similarly valued. We will take a look at Fossil Group Inc (NASDAQ:FOSL), Smith Micro Software, Inc. (NASDAQ:SMSI), Central Valley Community Bancorp (NASDAQ:CVCY), and Kezar Life Sciences, Inc. (NASDAQ:KZR). This group of stocks’ market caps are closest to BBCP’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.75 hedge funds with bullish positions and the average amount invested in these stocks was $11 million. That figure was $35 million in BBCP’s case. Fossil Group Inc (NASDAQ:FOSL) is the most popular stock in this table. On the other hand Central Valley Community Bancorp (NASDAQ:CVCY) is the least popular one with only 5 bullish hedge fund positions. Concrete Pumping Holdings, Inc. (NASDAQ:BBCP) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.2% in 2020 through June 17th but still beat the market by 14.8 percentage points. Hedge funds were also right about betting on BBCP as the stock returned 33.2% in Q2 (through June 17th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.