In this article we will analyze whether Clarivate Plc (NYSE:CCC) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.
Is CCC a good stock to buy? Clarivate Plc (NYSE:CCC) has seen a decrease in hedge fund interest of late. Clarivate Plc (NYSE:CCC) was in 37 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 45. Our calculations also showed that CCC 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).
Video: Watch our video about the top 5 most popular hedge fund stocks.
According to most traders, hedge funds are assumed to be unimportant, old financial vehicles of years past. While there are over 8000 funds with their doors open at the moment, Our experts look at the top tier of this club, approximately 850 funds. These hedge fund managers direct bulk of all hedge funds’ total asset base, and by following their first-class stock picks, Insider Monkey has figured out many investment strategies that have historically beaten the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy to pick the best large-cap stocks to buy. 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. Keeping this in mind we’re going to take a peek at the new hedge fund action surrounding Clarivate Plc (NYSE:CCC).
Do Hedge Funds Think CCC Is A Good Stock To Buy Now?
At the end of September, a total of 37 of the hedge funds tracked by Insider Monkey were long this stock, a change of -18% from the second quarter of 2020. On the other hand, there were a total of 38 hedge funds with a bullish position in CCC a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Clarivate Plc (NYSE:CCC) was held by Select Equity Group, which reported holding $810.3 million worth of stock at the end of September. It was followed by D1 Capital Partners with a $295 million position. Other investors bullish on the company included 40 North Management, JS Capital, and Harbor Spring Capital. In terms of the portfolio weights assigned to each position Antipodean Advisors allocated the biggest weight to Clarivate Plc (NYSE:CCC), around 14.46% of its 13F portfolio. Banbury Partners is also relatively very bullish on the stock, earmarking 8.36 percent of its 13F equity portfolio to CCC.
Because Clarivate Plc (NYSE:CCC) has experienced declining sentiment from the aggregate hedge fund industry, we can see that there is a sect of hedgies who were dropping their positions entirely by the end of the third quarter. It’s worth mentioning that Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital cut the biggest investment of the 750 funds monitored by Insider Monkey, worth an estimated $7.7 million in stock, and Paul Marshall and Ian Wace’s Marshall Wace LLP was right behind this move, as the fund sold off about $7.5 million worth. These transactions are interesting, as aggregate hedge fund interest fell by 8 funds by the end of the third quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Clarivate Plc (NYSE:CCC) but similarly valued. These stocks are Leidos Holdings Inc (NYSE:LDOS), Seagate Technology plc (NASDAQ:STX), Ulta Beauty, Inc. (NASDAQ:ULTA), United Rentals, Inc. (NYSE:URI), Hess Corporation (NYSE:HES), Monolithic Power Systems, Inc. (NASDAQ:MPWR), and Cloudflare, Inc. (NYSE:NET). All of these stocks’ market caps are closest to CCC’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 33.6 hedge funds with bullish positions and the average amount invested in these stocks was $851 million. That figure was $1730 million in CCC’s case. Cloudflare, Inc. (NYSE:NET) is the most popular stock in this table. On the other hand Seagate Technology plc (NASDAQ:STX) is the least popular one with only 23 bullish hedge fund positions. Clarivate Plc (NYSE:CCC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CCC is 55. 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 33.3% in 2020 through December 18th and beat the market again by 16.4 percentage points. Unfortunately CCC wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on CCC were disappointed as the stock returned -0.9% since the end of September (through 12/18) 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.