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Did Hedge Funds Drop The Ball On CIRCOR International, Inc. (CIR) ?

Insider Monkey finished processing more than 700 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of December 31st, 2018. In this article we are going to take a look at smart money sentiment towards CIRCOR International, Inc. (NYSE:CIR).

CIRCOR International, Inc. (NYSE:CIR) was in 6 hedge funds’ portfolios at the end of the fourth quarter of 2018. CIR has experienced an increase in hedge fund interest of late. There were 5 hedge funds in our database with CIR holdings at the end of the previous quarter. Our calculations also showed that CIR isn’t among the 30 most popular stocks among hedge funds.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Chuck Royce

Let’s take a gander at the new hedge fund action surrounding CIRCOR International, Inc. (NYSE:CIR).

What does the smart money think about CIRCOR International, Inc. (NYSE:CIR)?

Heading into the first quarter of 2019, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from the previous quarter. On the other hand, there were a total of 5 hedge funds with a bullish position in CIR a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

CIR_may2019

When looking at the institutional investors followed by Insider Monkey, Royce & Associates, managed by Chuck Royce, holds the largest position in CIRCOR International, Inc. (NYSE:CIR). Royce & Associates has a $47.6 million position in the stock, comprising 0.4% of its 13F portfolio. Sitting at the No. 2 spot is GAMCO Investors, managed by Mario Gabelli, which holds a $38.8 million position; 0.3% of its 13F portfolio is allocated to the company. Some other professional money managers that are bullish consist of Douglas Dethy’s DC Capital Partners, John D. Gillespie’s Prospector Partners and Ken Griffin’s Citadel Investment Group.

With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. Renaissance Technologies, managed by Jim Simons, initiated the largest position in CIRCOR International, Inc. (NYSE:CIR). Renaissance Technologies had $1.1 million invested in the company at the end of the quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as CIRCOR International, Inc. (NYSE:CIR) but similarly valued. We will take a look at EZCORP Inc (NASDAQ:EZPW), Adams Natural Resources Fund, Inc. (NYSE:PEO), Hingham Institution for Savings (NASDAQ:HIFS), and Fluidigm Corporation (NASDAQ:FLDM). This group of stocks’ market valuations resemble CIR’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
EZPW 20 106153 1
PEO 3 1894 1
HIFS 1 4627 0
FLDM 19 145319 7
Average 10.75 64498 2.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 10.75 hedge funds with bullish positions and the average amount invested in these stocks was $64 million. That figure was $99 million in CIR’s case. EZCORP Inc (NASDAQ:EZPW) is the most popular stock in this table. On the other hand Hingham Institution for Savings (NASDAQ:HIFS) is the least popular one with only 1 bullish hedge fund positions. CIRCOR International, Inc. (NYSE:CIR) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. A small number of hedge funds were also right about betting on CIR as the stock returned 72.6% and outperformed the market by an even larger margin.

Disclosure: None. This article was originally published at Insider Monkey.

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