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Hedge Fund Sentiment Is Stagnant On Carbonite Inc (CARB)

Is Carbonite Inc (NASDAQ:CARB) a good bet right now? We like to analyze hedge fund sentiment before doing days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy league graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.

Hedge fund interest in Carbonite Inc (NASDAQ:CARB) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare CARB to other stocks including Cellectis SA (NASDAQ:CLLS), Emerald Expositions Events, Inc. (NYSE:EEX), and FB Financial Corporation (NYSE:FBK) to get a better sense of its popularity.

At the moment there are numerous formulas shareholders use to analyze their holdings. A duo of the most innovative formulas are hedge fund and insider trading activity. We have shown that, historically, those who follow the top picks of the best money managers can outperform their index-focused peers by a healthy margin (see the details here).

MILLENNIUM MANAGEMENT

Let’s take a look at the key hedge fund action encompassing Carbonite Inc (NASDAQ:CARB).

What does the smart money think about Carbonite Inc (NASDAQ:CARB)?

Heading into the fourth quarter of 2018, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, no change from one quarter earlier. By comparison, 14 hedge funds held shares or bullish call options in CARB heading into this year. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

CARB_dec2018

When looking at the institutional investors followed by Insider Monkey, Jim Simons’s Renaissance Technologies has the largest position in Carbonite Inc (NASDAQ:CARB), worth close to $59.9 million, amounting to 0.1% of its total 13F portfolio. The second largest stake is held by Portolan Capital Management, led by George McCabe, holding a $54.4 million position; 5.4% of its 13F portfolio is allocated to the stock. Other professional money managers that are bullish contain Israel Englander’s Millennium Management, Joseph A. Jolson’s Harvest Capital Strategies and Brian C. Freckmann’s Lyon Street Capital.

Judging by the fact that Carbonite Inc (NASDAQ:CARB) has experienced falling interest from the entirety of the hedge funds we track, logic holds that there exists a select few hedgies that slashed their full holdings last quarter. Intriguingly, Howard Marks’s Oaktree Capital Management dropped the largest stake of the 700 funds watched by Insider Monkey, worth an estimated $4.4 million in stock. Michael Platt and William Reeves’s fund, BlueCrest Capital Mgmt., also cut its stock, about $1.6 million worth. These bearish behaviors are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now review hedge fund activity in other stocks similar to Carbonite Inc (NASDAQ:CARB). We will take a look at Cellectis SA (NASDAQ:CLLS), Emerald Expositions Events, Inc. (NYSE:EEX), FB Financial Corporation (NYSE:FBK), and First Bancorp (NASDAQ:FBNC). All of these stocks’ market caps are closest to CARB’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CLLS 13 66403 -2
EEX 10 11933 5
FBK 10 131713 -2
FBNC 16 133231 0
Average 12.25 85820 0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 12.25 hedge funds with bullish positions and the average amount invested in these stocks was $86 million. That figure was $184 million in CARB’s case. First Bancorp (NASDAQ:FBNC) is the most popular stock in this table. On the other hand Emerald Expositions Events, Inc. (NYSE:EEX) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Carbonite Inc (NASDAQ:CARB) 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.

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

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