Hedge Funds Are Dumping CSRA Inc (CSRA)

We at Insider Monkey have gone over 742 13F filings that hedge funds and prominent investors are required to file by the government. The 13F filings show the funds’ and investors’ portfolio positions as of September 30. In this article, we look at what those funds think of CSRA Inc (NYSE:CSRA) based on that data.

CSRA Inc (NYSE:CSRA) has experienced a decrease in activity from the world’s largest hedge funds in recent months. There were 27 hedge funds in our database with CSRA holdings at the end of the previous quarter. 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 Brunswick Corporation (NYSE:BC), Equity One, Inc. (NYSE:EQY), and Neurocrine Biosciences, Inc. (NASDAQ:NBIX) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

Now, let’s review the latest action surrounding CSRA Inc (NYSE:CSRA).

Hedge fund activity in CSRA Inc (NYSE:CSRA)

At Q3’s end, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a drop of 7% from the second quarter of 2016. On the other hand, there were a total of 31 hedge funds with a bullish position in CSRA at the beginning of this year. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were upping their holdings substantially (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, JANA Partners, led by Barry Rosenstein, holds the most valuable position in CSRA Inc (NYSE:CSRA). The fund reportedly has a $129.8 million position in the stock, comprising 2.3% of its 13F portfolio. Sitting at the No. 2 spot is Stelliam Investment Management, led by Ross Margolies, holding a $53.4 million position; the fund has 1.8% of its 13F portfolio invested in the stock. Remaining professional money managers with similar optimism consist of Doug Silverman and Alexander Klabin’s Senator Investment Group, Steve Cohen’s Point72 Asset Management and D. E. Shaw’s D E Shaw. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Judging by the fact that CSRA Inc (NYSE:CSRA) has gone through falling interest from the smart money, we can see that there is a sect of hedge funds that decided to sell off their entire stakes by the end of the third quarter. It’s worth mentioning that Cliff Asness’s AQR Capital Management dropped the largest investment of all the hedgies followed by Insider Monkey, totaling close to $8.7 million in stock. Jacob Gottlieb’s fund, Visium Asset Management, also said goodbye to its stock, about $1.8 million worth of CSRA shares.

Let’s now review hedge fund activity in other stocks similar to CSRA Inc (NYSE:CSRA). These stocks are Brunswick Corporation (NYSE:BC), Equity One, Inc. (NYSE:EQY), Neurocrine Biosciences, Inc. (NASDAQ:NBIX), and Grupo Aeroportuario del Sureste (ADR) (NYSE:ASR). This group of stocks’ market valuations resemble CSRA’s market valuation.

As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $317 million. That figure was $524 million in CSRA’s case. Neurocrine Biosciences, Inc. (NASDAQ:NBIX) is the most popular stock in this table. On the other hand Grupo Aeroportuario del Sureste (ADR) (NYSE:ASR) is the least popular one with only 9 bullish hedge fund positions. CSRA Inc (NYSE:CSRA) 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. In this regard NBIX might be a better candidate to consider taking a long position in.

Disclosure: none.