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 Central Valley Community Bancorp (NASDAQ:CVCY).
Is Central Valley Community Bancorp (NASDAQ:CVCY) a healthy stock for your portfolio? The best stock pickers are in a pessimistic mood. The number of bullish hedge fund bets were trimmed by 2 recently. Our calculations also showed that CVCY 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).
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.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. 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 let’s take a gander at the new hedge fund action surrounding Central Valley Community Bancorp (NASDAQ:CVCY).
Hedge fund activity in Central Valley Community Bancorp (NASDAQ:CVCY)
At Q1’s end, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -29% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in CVCY over the last 18 quarters. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Renaissance Technologies, holds the largest position in Central Valley Community Bancorp (NASDAQ:CVCY). Renaissance Technologies has a $2.5 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Renaissance Technologies’s heels is John D. Gillespie of Prospector Partners, with a $0.6 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining peers that hold long positions include David Harding’s Winton Capital Management, Ken Griffin’s Citadel Investment Group and Roger Ibbotson’s Zebra Capital Management. In terms of the portfolio weights assigned to each position Zebra Capital Management allocated the biggest weight to Central Valley Community Bancorp (NASDAQ:CVCY), around 0.23% of its 13F portfolio. Prospector Partners is also relatively very bullish on the stock, setting aside 0.12 percent of its 13F equity portfolio to CVCY.
Since Central Valley Community Bancorp (NASDAQ:CVCY) has experienced bearish sentiment from hedge fund managers, it’s safe to say that there exists a select few hedgies who were dropping their entire stakes by the end of the first quarter. It’s worth mentioning that Fred Cummings’s Elizabeth Park Capital Management dumped the biggest investment of the 750 funds monitored by Insider Monkey, worth about $9.7 million in stock, and Paul Marshall and Ian Wace’s Marshall Wace LLP was right behind this move, as the fund dropped about $0.3 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 2 funds by the end of the first quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Central Valley Community Bancorp (NASDAQ:CVCY) but similarly valued. These stocks are Kezar Life Sciences, Inc. (NASDAQ:KZR), Digimarc Corp (NASDAQ:DMRC), Net 1 UEPS Technologies Inc (NASDAQ:UEPS), and Modine Manufacturing Company (NYSE:MOD). This group of stocks’ market caps are closest to CVCY’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.5 hedge funds with bullish positions and the average amount invested in these stocks was $23 million. That figure was $4 million in CVCY’s case. Net 1 UEPS Technologies Inc (NASDAQ:UEPS) is the most popular stock in this table. On the other hand Digimarc Corp (NASDAQ:DMRC) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Central Valley Community Bancorp (NASDAQ:CVCY) is even less popular than DMRC. Hedge funds dodged a bullet by taking a bearish stance towards CVCY. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May but managed to beat the market by 13.2 percentage points. Unfortunately CVCY wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); CVCY investors were disappointed as the stock returned 16.3% during the second quarter (through the end of May) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.
Disclosure: None. This article was originally published at Insider Monkey.