The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Chase Corporation (NYSE:CCF).
Is CCF a good stock to buy now? Investors who are in the know were taking a bearish view. The number of bullish hedge fund bets fell by 1 lately. Chase Corporation (NYSE:CCF) was in 11 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 12. Our calculations also showed that CCF 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). There were 12 hedge funds in our database with CCF positions at the end of the second quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the 21st century investor’s toolkit there are a large number of indicators shareholders employ to analyze stocks. Two of the best indicators are hedge fund and insider trading signals. We have shown that, historically, those who follow the top picks of the best investment managers can beat the broader indices by a very impressive margin (see the details here).
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 15 best blue chip stocks 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. Now let’s check out the recent hedge fund action surrounding Chase Corporation (NYSE:CCF).
Do Hedge Funds Think CCF Is A Good Stock To Buy Now?
At third quarter’s end, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of -8% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in CCF over the last 21 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
The largest stake in Chase Corporation (NYSE:CCF) was held by Renaissance Technologies, which reported holding $38.7 million worth of stock at the end of September. It was followed by Royce & Associates with a $16.7 million position. Other investors bullish on the company included Minerva Advisors, AltraVue Capital, and Arrowstreet Capital. In terms of the portfolio weights assigned to each position Minerva Advisors allocated the biggest weight to Chase Corporation (NYSE:CCF), around 10% of its 13F portfolio. AltraVue Capital is also relatively very bullish on the stock, earmarking 2.32 percent of its 13F equity portfolio to CCF.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Zebra Capital Management. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because none of the 750+ hedge funds tracked by Insider Monkey identified CCF as a viable investment and initiated a position in the stock.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Chase Corporation (NYSE:CCF) but similarly valued. These stocks are Huron Consulting Group Inc. (NASDAQ:HURN), Fanhua Inc. (NASDAQ:FANH), OrthoPediatrics Corp. (NASDAQ:KIDS), Systemax Inc. (NYSE:SYX), Fulgent Genetics, Inc. (NASDAQ:FLGT), Dine Brands Global, Inc. (NYSE:DIN), and SFL Corporation Ltd. (NYSE:SFL). This group of stocks’ market valuations are closest to CCF’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 12.1 hedge funds with bullish positions and the average amount invested in these stocks was $50 million. That figure was $82 million in CCF’s case. Dine Brands Global, Inc. (NYSE:DIN) is the most popular stock in this table. On the other hand Fanhua Inc. (NASDAQ:FANH) is the least popular one with only 5 bullish hedge fund positions. Chase Corporation (NYSE:CCF) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CCF is 46.5. 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. 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 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on CCF as the stock returned 23.3% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.