How Cousins Properties Inc (CUZ) Stacks Up Against Barnes Group and Puma Biotechnology

At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.

Is Cousins Properties Inc (NYSE:CUZ) a buy here? Hedge funds are thoroughly getting less optimistic. The number of bullish hedge fund bets that are revealed through the 13F filings were trimmed by 6 in recent months. There were 15 hedge funds in our database with CUZ positions at the end of the previous quarter. At the end of this article we will also compare CUZ to other stocks including Kate Spade & Co (NYSE:KATE), Alamos Gold Inc (NYSE:AGI), and Barnes Group Inc. (NYSE:B) to get a better sense of its popularity.

Follow Cousins Properties Inc (NYSE:CUZ)

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.

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Keeping this in mind, let’s view the recent action surrounding Cousins Properties Inc (NYSE:CUZ).

What does the smart money think about Cousins Properties Inc (NYSE:CUZ)?

At Q3’s end, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -40% from the previous quarter. By comparison, 14 hedge funds held shares or bullish call options in CUZ heading into this year. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, one of the largest hedge funds in the world has the biggest position in Cousins Properties Inc (NYSE:CUZ), worth close to $12.9 million, corresponding to less than 0.1%% of its total 13F portfolio. The second most bullish fund manager is Two Sigma Advisors, led by John Overdeck and David Siegel, holding a $9.5 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other members of the smart money that are bullish encompass Cliff Asness’s AQR Capital Management, George Hall’s Clinton Group and Paul Tudor Jones’s Tudor Investment Corp. 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.

Because Cousins Properties Inc (NYSE:CUZ) has experienced bearish sentiment from the aggregate hedge fund industry, we can see that there was a specific group of money managers that slashed their positions entirely by the end of the third quarter. Interestingly, Israel Englander’s Millennium Management said goodbye to the biggest stake of the “upper crust” of funds monitored by Insider Monkey, comprising about $17.7 million in stock, and Dmitry Balyasny’s Balyasny Asset Management was right behind this move, as the fund dropped about $2.7 million worth of shares.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Cousins Properties Inc (NYSE:CUZ) but similarly valued. These stocks are Kate Spade & Co (NYSE:KATE), Alamos Gold Inc (NYSE:AGI), Barnes Group Inc. (NYSE:B), and Puma Biotechnology Inc (NYSE:PBYI). This group of stocks’ market values are similar to CUZ’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
KATE 29 535210 -1
AGI 12 119797 -4
B 17 33534 1
PBYI 24 793828 9

As you can see these stocks had an average of 20.5 hedge funds with bullish positions and the average amount invested in these stocks was $371 million. That figure was $32 million in CUZ’s case. Kate Spade & Co (NYSE:KATE) is the most popular stock in this table. On the other hand Alamos Gold Inc (NYSE:AGI) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Cousins Properties Inc (NYSE:CUZ) is even less popular than AGI. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.