A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on CHP Merger Corp. (NASDAQ:CHPM).
Is CHPM a good stock to buy now? Investors who are in the know were becoming more confident. The number of long hedge fund bets advanced by 16 lately. CHP Merger Corp. (NASDAQ:CHPM) was in 16 hedge funds’ portfolios at the end of September. Our calculations also showed that CHPM 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.
In the eyes of most investors, hedge funds are viewed as underperforming, outdated investment tools of yesteryear. While there are over 8000 funds trading today, Our researchers look at the elite of this group, approximately 850 funds. These hedge fund managers have their hands on bulk of the smart money’s total capital, and by keeping track of their matchless picks, Insider Monkey has determined numerous investment strategies that have historically outperformed the market. Insider Monkey’s flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points annually 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 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 go over the recent hedge fund action surrounding CHP Merger Corp. (NASDAQ:CHPM).
Do Hedge Funds Think CHPM Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 16 from the previous quarter. The graph below displays the number of hedge funds with bullish position in CHPM over the last 21 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Ratan Capital Group was the largest shareholder of CHP Merger Corp. (NASDAQ:CHPM), with a stake worth $24.2 million reported as of the end of September. Trailing Ratan Capital Group was Glazer Capital, which amassed a stake valued at $22.8 million. Millennium Management, Governors Lane, and HBK Investments 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 Ratan Capital Group allocated the biggest weight to CHP Merger Corp. (NASDAQ:CHPM), around 3.57% of its 13F portfolio. Glazer Capital is also relatively very bullish on the stock, dishing out 1.12 percent of its 13F equity portfolio to CHPM.
Consequently, some big names have been driving this bullishness. Ratan Capital Group, managed by Nehal Chopra, initiated the largest position in CHP Merger Corp. (NASDAQ:CHPM). Ratan Capital Group had $24.2 million invested in the company at the end of the quarter. Paul Glazer’s Glazer Capital also initiated a $22.8 million position during the quarter. The other funds with new positions in the stock are Israel Englander’s Millennium Management, Isaac Corre’s Governors Lane, and David Costen Haley’s HBK Investments.
Let’s also examine hedge fund activity in other stocks similar to CHP Merger Corp. (NASDAQ:CHPM). We will take a look at Pzena Investment Management Inc (NYSE:PZN), Co-Diagnostics, Inc. (NASDAQ:CODX), Peoples Bancorp Inc. (NASDAQ:PEBO), Heidrick & Struggles International, Inc. (NASDAQ:HSII), Donegal Group, Inc. (NASDAQ:DGICB), Altabancorp (NASDAQ:ALTA), and BioDelivery Sciences International, Inc. (NASDAQ:BDSI). All of these stocks’ market caps are similar to CHPM’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 8.1 hedge funds with bullish positions and the average amount invested in these stocks was $28 million. That figure was $101 million in CHPM’s case. BioDelivery Sciences International, Inc. (NASDAQ:BDSI) is the most popular stock in this table. On the other hand Donegal Group, Inc. (NASDAQ:DGICB) is the least popular one with only 1 bullish hedge fund positions. CHP Merger Corp. (NASDAQ:CHPM) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CHPM is 70. 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 30.7% in 2020 through December 14th and beat the market again by 15.8 percentage points. Unfortunately CHPM wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on CHPM were disappointed as the stock returned 0.6% since the end of September (through 12/14) 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.