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. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Cimpress plc (NASDAQ:CMPR).
Is Cimpress plc (NASDAQ:CMPR) a buy, sell, or hold? The smart money is getting more bullish. The number of bullish hedge fund bets inched up by 1 recently. Our calculations also showed that CMPR isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). CMPR was in 19 hedge funds’ portfolios at the end of March. There were 18 hedge funds in our database with CMPR holdings at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. 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 S&P 500 ETFs by 58 percentage points since March 2017 (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.
Ben Stein of Spruce House Investment Management
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to review the key hedge fund action regarding Cimpress plc (NASDAQ:CMPR).
Hedge fund activity in Cimpress plc (NASDAQ:CMPR)
Heading into the second quarter of 2020, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 6% from one quarter earlier. On the other hand, there were a total of 11 hedge funds with a bullish position in CMPR a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Zachary Sternberg and Benjamin Stein’s Spruce House Investment Management has the most valuable position in Cimpress plc (NASDAQ:CMPR), worth close to $125.5 million, accounting for 7.9% of its total 13F portfolio. On Spruce House Investment Management’s heels is Allan Mecham of Arlington Value Capital, with a $85.3 million position; the fund has 12.4% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that are bullish comprise D. E. Shaw’s D E Shaw, Renaissance Technologies and Brian Bares’s Bares Capital Management. In terms of the portfolio weights assigned to each position Arlington Value Capital allocated the biggest weight to Cimpress plc (NASDAQ:CMPR), around 12.39% of its 13F portfolio. Spruce House Investment Management is also relatively very bullish on the stock, earmarking 7.92 percent of its 13F equity portfolio to CMPR.
As aggregate interest increased, some big names were leading the bulls’ herd. Diamond Hill Capital, managed by Ric Dillon, assembled the largest position in Cimpress plc (NASDAQ:CMPR). Diamond Hill Capital had $5.5 million invested in the company at the end of the quarter. Ari Zweiman’s 683 Capital Partners also initiated a $4.5 million position during the quarter. The other funds with new positions in the stock are Greg Eisner’s Engineers Gate Manager, Cliff Asness’s AQR Capital Management, and Paul Marshall and Ian Wace’s Marshall Wace LLP.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Cimpress plc (NASDAQ:CMPR) but similarly valued. These stocks are Ryder System, Inc. (NYSE:R), Mack Cali Realty Corp (NYSE:CLI), Meritage Homes Corp (NYSE:MTH), and Hilltop Holdings Inc. (NYSE:HTH). All of these stocks’ market caps are similar to CMPR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| R | 18 | 157531 | -5 |
| CLI | 10 | 73802 | -5 |
| MTH | 22 | 155253 | -7 |
| HTH | 15 | 58772 | -4 |
| Average | 16.25 | 111340 | -5.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.25 hedge funds with bullish positions and the average amount invested in these stocks was $111 million. That figure was $270 million in CMPR’s case. Meritage Homes Corp (NYSE:MTH) is the most popular stock in this table. On the other hand Mack Cali Realty Corp (NYSE:CLI) is the least popular one with only 10 bullish hedge fund positions. Cimpress plc (NASDAQ:CMPR) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.4% in 2020 through June 22nd but still beat the market by 15.9 percentage points. Hedge funds were also right about betting on CMPR as the stock returned 48.4% in Q2 (through June 22nd) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
