Do Hedge Funds Love Citizens Community Bancorp Inc. (CZWI)?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. In this article we look at what those investors think of Citizens Community Bancorp Inc. (NASDAQ:CZWI).

Citizens Community Bancorp Inc. (NASDAQ:CZWI) was in 6 hedge funds’ portfolios at the end of March. CZWI has experienced a decrease in hedge fund sentiment lately. There were 7 hedge funds in our database with CZWI positions at the end of the previous quarter. Our calculations also showed that CZWI 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).

Video: Watch our video about the top 5 most popular hedge fund stocks.

If you’d ask most stock holders, hedge funds are assumed to be slow, outdated financial tools of yesteryear. While there are more than 8000 funds trading at the moment, Our experts hone in on the leaders of this club, approximately 850 funds. These hedge fund managers oversee bulk of the hedge fund industry’s total capital, and by observing their highest performing picks, Insider Monkey has come up with a number of investment strategies that have historically outperformed the broader indices. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

Millennium Management, Catapult Capital Management

Israel Englander of Millennium Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to take a look at the recent hedge fund action encompassing Citizens Community Bancorp Inc. (NASDAQ:CZWI).

How have hedgies been trading Citizens Community Bancorp Inc. (NASDAQ:CZWI)?

At the end of the first quarter, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -14% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CZWI over the last 18 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is CZWI A Good Stock To Buy?

More specifically, Fourthstone LLC was the largest shareholder of Citizens Community Bancorp Inc. (NASDAQ:CZWI), with a stake worth $7 million reported as of the end of September. Trailing Fourthstone LLC was Tontine Asset Management, which amassed a stake valued at $1.7 million. EJF Capital, Millennium Management, and ExodusPoint Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Fourthstone LLC allocated the biggest weight to Citizens Community Bancorp Inc. (NASDAQ:CZWI), around 6.33% of its 13F portfolio. Tontine Asset Management is also relatively very bullish on the stock, setting aside 0.52 percent of its 13F equity portfolio to CZWI.

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: One68 Global 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 750+ hedge funds tracked by Insider Monkey identified CZWI as a viable investment and initiated a position in the stock.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Citizens Community Bancorp Inc. (NASDAQ:CZWI) but similarly valued. These stocks are Century Casinos, Inc. (NASDAQ:CNTY), Greenlane Holdings, Inc. (NASDAQ:GNLN), Orgenesis Inc. (NASDAQ:ORGS), and Pennsylvania Real Estate Investment Trust (NYSE:PEI). All of these stocks’ market caps match CZWI’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CNTY 8 13239 -4
GNLN 6 2321 2
ORGS 2 4358 1
PEI 6 1164 2
Average 5.5 5271 0.25

View table here if you experience formatting issues.

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 $5 million. That figure was $10 million in CZWI’s case. Century Casinos, Inc. (NASDAQ:CNTY) is the most popular stock in this table. On the other hand Orgenesis Inc. (NASDAQ:ORGS) is the least popular one with only 2 bullish hedge fund positions. Citizens Community Bancorp Inc. (NASDAQ:CZWI) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 13.9% in 2020 through June 10th but beat the market by 14.2 percentage points. Unfortunately CZWI wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on CZWI were disappointed as the stock returned 17.1% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.

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