Is Cabot Corp (NYSE:CBT) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before doing days of research on it. Given their 2-and-20 payment structure, hedge funds have more resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also have numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Cabot Corp (NYSE:CBT) has experienced a decrease in hedge fund sentiment in recent months, with ownership of the stock among the investors that we track sliding to 28. At the end of this article we will also compare Cabot Corp (NYSE:CBT) to other stocks including Belden Inc. (NYSE:BDC), Corporate Office Properties Trust (NYSE:OFC), and Glacier Bancorp, Inc. (NASDAQ:GBCI) to get a better sense of its popularity.
At the moment there are a lot of formulas shareholders use to assess their stock investments. A duo of the most under-the-radar formulas are hedge fund and insider trading indicators. Experts at Insider Monkey, a website specializing in hedge funds, have shown that, historically, those who follow the top picks of the top money managers can trounce the S&P 500 by a significant amount (see the details here).
Now, we’re going to check out the key action regarding Cabot Corp (NYSE:CBT).
What have hedge funds been doing with Cabot Corp (NYSE:CBT)?
Heading into Q4, a total of 28 of the hedge funds tracked by Insider Monkey were bullish in this stock, a drop of 3% from the second quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
According to publicly available hedge fund holdings data compiled by Insider Monkey, Israel Englander’s Millennium Management has the largest position in Cabot Corp (NYSE:CBT), worth close to $23.2 million, corresponding to less than 0.1% of its total 13F portfolio. The second-largest stake is held by Lee Munder Capital Group, managed by Lee Munder, which holds a $20.8 million position; 0.4% of its 13F portfolio is allocated to the stock. Other members of the smart money with similar optimism comprise Cliff Asness’ AQR Capital Management, Youlia Miteva’s Proxima Capital Management, and Chuck Royce’s Royce & Associates.
Due to the fact that Cabot Corp (NYSE:CBT) has faced a declination in interest from the smart money, it’s safe to say that there exists a select few fund managers that decided to sell off their full holdings last quarter. At the top of the heap, Ken Gray and Steve Walsh’s Bryn Mawr Capital said goodbye to the largest stake of the “upper crust” of funds monitored by Insider Monkey, valued at about $3.8 million in stock. Peter Muller’s fund, PDT Partners, also cut its stock, about $2.7 million worth. These moves are interesting, as total hedge fund interest was cut by one fund last quarter.
Let’s also examine hedge fund activity in other stocks similar to Cabot Corp (NYSE:CBT). We will take a look at Belden Inc. (NYSE:BDC), Corporate Office Properties Trust (NYSE:OFC), Glacier Bancorp, Inc. (NASDAQ:GBCI), and Nord Anglia Education Inc (NYSE:NORD). All of these stocks’ market caps match Cabot Corp (NYSE:CBT)’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $113 million, just ahead of the $107 million invested in Cabot Corp. Belden Inc. (NYSE:BDC) is the most popular stock in this table. On the other hand Nord Anglia Education Inc (NYSE:NORD) is the least popular one with only ten bullish hedge fund positions. Compared to these stocks Cabot Corp (NYSE:CBT) is more popular among hedge funds. Considering that hedge funds are fond of this stock relative to its peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.