Hedge Funds Have Never Been This Bullish On Civitas Solutions Inc (CIVI)

At Insider Monkey, we pore over the filings of nearly 750 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of December 31. In this article, we will use that wealth of knowledge to determine whether or not Civitas Solutions Inc (NYSE:CIVI) makes for a good investment right now.

Civitas Solutions Inc (NYSE:CIVI) was in 15 hedge funds’ portfolios at the end of December. CIVI has seen an increase in hedge fund sentiment in recent months. There were 12 hedge funds in our database with CIVI positions at the end of the previous quarter. Our calculations also showed that CIVI isn’t among the 30 most popular stocks among hedge funds.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Alexander Seaver Stadium Capital

We’re going to check out the key hedge fund action surrounding Civitas Solutions Inc (NYSE:CIVI).

How are hedge funds trading Civitas Solutions Inc (NYSE:CIVI)?

Heading into the first quarter of 2019, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 25% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in CIVI over the last 14 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).


Among these funds, Stadium Capital Management held the most valuable stake in Civitas Solutions Inc (NYSE:CIVI), which was worth $49.4 million at the end of the fourth quarter. On the second spot was Water Island Capital which amassed $9.2 million worth of shares. Moreover, Millennium Management, Perella Weinberg Partners, and Anchorage Advisors were also bullish on Civitas Solutions Inc (NYSE:CIVI), allocating a large percentage of their portfolios to this stock.

Now, key money managers have been driving this bullishness. Water Island Capital, managed by John Orrico, created the biggest position in Civitas Solutions Inc (NYSE:CIVI). Water Island Capital had $9.2 million invested in the company at the end of the quarter. Daniel Arbess’s Perella Weinberg Partners also initiated a $2.5 million position during the quarter. The other funds with new positions in the stock are Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, Mario Gabelli’s GAMCO Investors, and James Dondero’s Highland Capital Management.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Civitas Solutions Inc (NYSE:CIVI) but similarly valued. We will take a look at SIGA Technologies Inc. (NASDAQ:SIGA), i3 Verticals, Inc. (NASDAQ:IIIV), Univest Corp. of PA (NASDAQ:UVSP), and John B. Sanfilippo & Son, Inc. (NASDAQ:JBSS). This group of stocks’ market values are closest to CIVI’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SIGA 10 44299 1
IIIV 8 78989 -4
UVSP 5 25481 -2
JBSS 10 93482 2
Average 8.25 60563 -0.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 8.25 hedge funds with bullish positions and the average amount invested in these stocks was $61 million. That figure was $77 million in CIVI’s case. SIGA Technologies Inc. (NASDAQ:SIGA) is the most popular stock in this table. On the other hand Univest Corp. of PA (NASDAQ:UVSP) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Civitas Solutions Inc (NYSE:CIVI) is more popular among hedge funds. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately CIVI wasn’t nearly as popular as these 15 stock and hedge funds that were betting on CIVI were disappointed as the stock returned -100% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.

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