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Hedge Funds Are Selling US Concrete Inc (USCR)

The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards US Concrete Inc (NASDAQ:USCR).

US Concrete Inc (NASDAQ:USCR) was in 19 hedge funds’ portfolios at the end of September. USCR has seen a decrease in activity from the world’s largest hedge funds in recent months. There were 20 hedge funds in our database with USCR positions at the end of the previous quarter. Our calculations also showed that USCR isn’t among the 30 most popular stocks among hedge funds.

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.

Steve Cohen SAC CAPITAL ADVISORS

We’re going to take a gander at the latest hedge fund action regarding US Concrete Inc (NASDAQ:USCR).

How are hedge funds trading US Concrete Inc (NASDAQ:USCR)?

At the end of the third quarter, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of -5% from the second quarter of 2018. Below, you can check out the change in hedge fund sentiment towards USCR over the last 13 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

USCR_dec2018

More specifically, Point72 Asset Management was the largest shareholder of US Concrete Inc (NASDAQ:USCR), with a stake worth $38.6 million reported as of the end of September. Trailing Point72 Asset Management was Scopus Asset Management, which amassed a stake valued at $22.7 million. GMT Capital, Scopus Asset Management, and Millennium Management were also very fond of the stock, giving the stock large weights in their portfolios.

Because US Concrete Inc (NASDAQ:USCR) has experienced declining sentiment from the smart money, it’s easy to see that there lies a certain “tier” of funds who were dropping their entire stakes by the end of the third quarter. At the top of the heap, Steve Cohen’s Point72 Asset Management dumped the biggest position of all the hedgies followed by Insider Monkey, totaling close to $6.6 million in stock. David Warren’s fund, DW Partners, also sold off its stock, about $3.4 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds by the end of the third quarter.

Let’s also examine hedge fund activity in other stocks similar to US Concrete Inc (NASDAQ:USCR). We will take a look at Federal Agricultural Mortgage Corp. (NYSE:AGM), Seabridge Gold, Inc. (NYSE:SA), Ballard Power Systems Inc. (NASDAQ:BLDP), and Rent-A-Center Inc (NASDAQ:RCII). This group of stocks’ market valuations match USCR’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
AGM 7 33423 -3
SA 7 39748 1
BLDP 3 644 -2
RCII 17 167244 0
Average 8.5 60265 -1

View table here if you experience formatting issues.

As you can see these stocks had an average of 8.5 hedge funds with bullish positions and the average amount invested in these stocks was $60 million. That figure was $108 million in USCR’s case. Rent-A-Center Inc (NASDAQ:RCII) is the most popular stock in this table. On the other hand Ballard Power Systems Inc. (NASDAQ:BLDP) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks US Concrete Inc (NASDAQ:USCR) 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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