Hedge Funds Are Betting On Casella Waste Systems Inc. (CWST)

You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make a proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.

Is Casella Waste Systems Inc. (NASDAQ:CWST) going to take off soon? Money managers are buying. The number of bullish hedge fund positions increased by 1 in recent months. 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 KEYW Holding Corp. (NASDAQ:KEYW), Limoneira Company (NASDAQ:LMNR), and NVE Corporation (NASDAQ:NVEC) to gather more data points.

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In the financial world there are a lot of signals stock traders have at their disposal to appraise stocks. Two of the best signals are hedge fund and insider trading moves. We have shown that, historically, those who follow the best picks of the best investment managers can outclass the broader indices by a healthy margin (see the details here).

Keeping this in mind, let’s take a glance at the new action encompassing Casella Waste Systems Inc. (NASDAQ:CWST).

How are hedge funds trading Casella Waste Systems Inc. (NASDAQ:CWST)?

At Q3’s end, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of 8% from one quarter earlier. With the smart money’s sentiment swirling, there exist a few noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Portolan Capital Management, managed by George McCabe, holds the number one position in Casella Waste Systems Inc. (NASDAQ:CWST). Portolan Capital Management has a $22.8 million position in the stock, comprising 3% of its 13F portfolio. The second largest stake is held by Rutabaga Capital Management, managed by Peter Schliemann, which holds a $12.4 million position; 1.5% of its 13F portfolio is allocated to the company. Some other professional money managers with similar optimism include Charles Paquelet’s Skylands Capital, Jim Simons’s Renaissance Technologies and Peter Keane’s Keane Capital Management.

As one would reasonably expect, key money managers have jumped into Casella Waste Systems Inc. (NASDAQ:CWST) headfirst. Highbridge Capital Management, managed by Glenn Russell Dubin, initiated the largest position in Casella Waste Systems Inc. (NASDAQ:CWST). Highbridge Capital Management had $0.2 million invested in the company at the end of the quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Casella Waste Systems Inc. (NASDAQ:CWST) but similarly valued. We will take a look at KEYW Holding Corp. (NASDAQ:KEYW), Limoneira Company (NASDAQ:LMNR), NVE Corporation (NASDAQ:NVEC), and P.A.M. Transportation Services, Inc. (NASDAQ:PTSI). All of these stocks’ market caps resemble CWST’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
KEYW 8 5412 1
LMNR 7 9391 -3
NVEC 7 32719 2
PTSI 4 13916 -3

As you can see these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $15 million. That figure was $56 million in CWST’s case. KEYW Holding Corp. (NASDAQ:KEYW) is the most popular stock in this table. On the other hand P.A.M. Transportation Services, Inc. (NASDAQ:PTSI) is the least popular one with only 4 bullish hedge fund positions. In comparison, Casella Waste Systems Inc. (NASDAQ:CWST) with 14 bullish hedge fund positions is the most popular stock in this group. Since the smart money is behind this stock, it might represent a good buying opportunity at the moment. Hence, it may be a good idea to analyze it in detail and potentially include it in your portfolio.