Reputable billionaire investors such as Nelson Peltz and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won’t accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.
Cambrex Corporation (NYSE:CBM) investors should be aware of an increase in support from the world’s most elite money managers lately. 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 Insperity Inc (NYSE:NSP), Avon Products, Inc. (NYSE:AVP), and South State Corporation (NASDAQ:SSB) to gather more data points.
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With all of this in mind, we’re going to take a glance at the latest action surrounding Cambrex Corporation (NYSE:CBM).
How have hedgies been trading Cambrex Corporation (NYSE:CBM)?
At the end of the third quarter, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, up 12% from the second quarter of 2016. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Robert B. Gillam’s McKinley Capital Management has the most valuable position in Cambrex Corporation (NYSE:CBM), worth close to $6.4 million and accounting for 0.2% of its total 13F portfolio. Sitting at the No. 2 spot is Marshall Wace LLP, managed by Paul Marshall and Ian Wace, which holds a $6.1 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Remaining members of the smart money that are bullish encompass Cliff Asness’s AQR Capital Management, Steve Cohen’s Point72 Asset Management and Martin Whitman’s Third Avenue Management.
With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, created the largest position in Cambrex Corporation (NYSE:CBM). Marshall Wace LLP had $6.1 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $2.2 million position during the quarter. The following funds were also among the new CBM investors: David Costen Haley’s HBK Investments, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Matthew Hulsizer’s PEAK6 Capital Management.
Let’s now review hedge fund activity in other stocks similar to Cambrex Corporation (NYSE:CBM). These stocks are Insperity Inc (NYSE:NSP), Avon Products, Inc. (NYSE:AVP), South State Corporation (NASDAQ:SSB), and Cooper Tire & Rubber Company (NYSE:CTB). All of these stocks’ market caps are closest to CBM’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $190 million. That figure was just $47 million in CBM’s case. Avon Products, Inc. (NYSE:AVP) is the most popular stock in this table. On the other hand South State Corporation (NASDAQ:SSB) is the least popular one with only 11 bullish hedge fund positions. Cambrex Corporation (NYSE:CBM) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard AVP might be a better candidate to consider a long position.