At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Concrete Pumping Holdings, Inc. (NASDAQ:BBCP).
Is BBCP a good stock to buy now? Hedge fund interest in Concrete Pumping Holdings, Inc. (NASDAQ:BBCP) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that BBCP isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). At the end of this article we will also compare BBCP to other stocks including XOMA Corp (NASDAQ:XOMA), Arcimoto, Inc. (NASDAQ:FUV), and Bioceres Crop Solutions Corp. (NYSE:BIOX) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
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 monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 5 best cheap stocks to buy according to Ray Dalio to identify stocks with upside potential. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now let’s review the key hedge fund action surrounding Concrete Pumping Holdings, Inc. (NASDAQ:BBCP).
How are hedge funds trading Concrete Pumping Holdings, Inc. (NASDAQ:BBCP)?
At the end of September, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 9 hedge funds with a bullish position in BBCP a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
More specifically, Owl Creek Asset Management was the largest shareholder of Concrete Pumping Holdings, Inc. (NASDAQ:BBCP), with a stake worth $16.4 million reported as of the end of September. Trailing Owl Creek Asset Management was ACK Asset Management, which amassed a stake valued at $10.4 million. Royce & Associates, Osmium Partners, and Mountain Lake Investment Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position ACK Asset Management allocated the biggest weight to Concrete Pumping Holdings, Inc. (NASDAQ:BBCP), around 5.35% of its 13F portfolio. Osmium Partners is also relatively very bullish on the stock, dishing out 4.72 percent of its 13F equity portfolio to BBCP.
Judging by the fact that Concrete Pumping Holdings, Inc. (NASDAQ:BBCP) has faced declining sentiment from the aggregate hedge fund industry, it’s easy to see that there exists a select few hedgies that elected to cut their full holdings heading into Q4. Intriguingly, Israel Englander’s Millennium Management dumped the largest investment of all the hedgies watched by Insider Monkey, comprising an estimated $0.6 million in stock. Greg Eisner’s fund, Engineers Gate Manager, also cut its stock, about $0.1 million worth. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now take a look at hedge fund activity in other stocks similar to Concrete Pumping Holdings, Inc. (NASDAQ:BBCP). These stocks are XOMA Corp (NASDAQ:XOMA), Arcimoto, Inc. (NASDAQ:FUV), Bioceres Crop Solutions Corp. (NYSE:BIOX), NL Industries, Inc. (NYSE:NL), Atomera Incorporated (NASDAQ:ATOM), SmartFinancial, Inc. (NASDAQ:SMBK), and ADMA Biologics Inc (NASDAQ:ADMA). This group of stocks’ market valuations match BBCP’s market valuation.
|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 6.1 hedge funds with bullish positions and the average amount invested in these stocks was $25 million. That figure was $34 million in BBCP’s case. ADMA Biologics Inc (NASDAQ:ADMA) is the most popular stock in this table. On the other hand Arcimoto, Inc. (NASDAQ:FUV) is the least popular one with only 1 bullish hedge fund positions. Concrete Pumping Holdings, Inc. (NASDAQ:BBCP) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BBCP is 39.9. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 31.6% in 2020 through December 2nd and beat the market again by 16 percentage points. Unfortunately BBCP wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on BBCP were disappointed as the stock returned 0.7% since the end of September (through 12/2) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.