Hedge Funds Are Crazy About Cavco Industries, Inc. (CVCO)

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 866 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. In this article we look at what those investors think of Cavco Industries, Inc. (NASDAQ:CVCO).

Is Cavco Industries, Inc. (NASDAQ:CVCO) a superb investment right now? The best stock pickers were in a bullish mood. The number of bullish hedge fund bets rose by 2 recently. Cavco Industries, Inc. (NASDAQ:CVCO) was in 22 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 23. Our calculations also showed that CVCO isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 20 hedge funds in our database with CVCO positions at the end of the fourth quarter.

At the moment there are tons of metrics stock market investors use to size up publicly traded companies. A duo of the less known metrics are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the best picks of the top fund managers can outpace their index-focused peers by a very impressive margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Mario Gabelli of GAMCO Investors

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we’re going to analyze the key hedge fund action regarding Cavco Industries, Inc. (NASDAQ:CVCO).

Do Hedge Funds Think CVCO Is A Good Stock To Buy Now?

At the end of March, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 10% from the fourth quarter of 2020. On the other hand, there were a total of 20 hedge funds with a bullish position in CVCO a year ago. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).

Is CVCO A Good Stock To Buy?

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Broad Bay Capital, managed by Richard Scott Greeder, holds the largest position in Cavco Industries, Inc. (NASDAQ:CVCO). Broad Bay Capital has a $67 million position in the stock, comprising 7.8% of its 13F portfolio. On Broad Bay Capital’s heels is Mario Gabelli of GAMCO Investors, with a $53.4 million position; 0.5% of its 13F portfolio is allocated to the company. Other peers that are bullish comprise Chuck Royce’s Royce & Associates, Ken Grossman and Glen Schneider’s SG Capital Management and Ken Fisher’s Fisher Asset Management. In terms of the portfolio weights assigned to each position Broad Bay Capital allocated the biggest weight to Cavco Industries, Inc. (NASDAQ:CVCO), around 7.83% of its 13F portfolio. SG Capital Management is also relatively very bullish on the stock, setting aside 3.37 percent of its 13F equity portfolio to CVCO.

Now, key money managers were leading the bulls’ herd. Waratah Capital Advisors, managed by Brad Dunkley and Blair Levinsky, initiated the most valuable position in Cavco Industries, Inc. (NASDAQ:CVCO). Waratah Capital Advisors had $6.8 million invested in the company at the end of the quarter. Noam Gottesman’s GLG Partners also initiated a $1.5 million position during the quarter. The only other fund with a brand new CVCO position is Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Let’s now review hedge fund activity in other stocks similar to Cavco Industries, Inc. (NASDAQ:CVCO). These stocks are Bally’s Corporation (NYSE:BALY), NetScout Systems, Inc. (NASDAQ:NTCT), TPI Composites, Inc. (NASDAQ:TPIC), Sonic Automotive Inc (NYSE:SAH), Sandy Spring Bancorp Inc. (NASDAQ:SASR), Eventbrite, Inc. (NYSE:EB), and Health Catalyst, Inc (NASDAQ:HCAT). All of these stocks’ market caps are closest to CVCO’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BALY 18 415596 -7
NTCT 11 115827 4
TPIC 18 124306 -9
SAH 17 102454 -1
SASR 12 38897 4
EB 24 351562 -2
HCAT 20 134687 -1
Average 17.1 183333 -1.7

View table here if you experience formatting issues.

As you can see these stocks had an average of 17.1 hedge funds with bullish positions and the average amount invested in these stocks was $183 million. That figure was $198 million in CVCO’s case. Eventbrite, Inc. (NYSE:EB) is the most popular stock in this table. On the other hand NetScout Systems, Inc. (NASDAQ:NTCT) is the least popular one with only 11 bullish hedge fund positions. Cavco Industries, Inc. (NASDAQ:CVCO) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CVCO is 78. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and beat the market again by 7.7 percentage points. Unfortunately CVCO wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CVCO were disappointed as the stock returned -6.9% since the end of March (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

Follow Cavco Industries Inc. (NASDAQ:CVCO)

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