Is CIBER, Inc. (CBR) a Good Stock to Buy?

We have been waiting for this for a year and finally the third quarter ended up showing a nice bump in the performance of small-cap stocks. Both the S&P 500 and Russell 2000 were up since the end of the second quarter, but small-cap stocks outperformed the large-cap stocks by double digits. This is important for hedge funds, which are big supporters of small-cap stocks, because their investors started pulling some of their capital out due to poor recent performance. It is very likely that equity hedge funds will deliver better risk adjusted returns in the second half of this year. In this article we are going to look at how this recent market trend affected the sentiment of hedge funds towards CIBER, Inc. (NYSE:CBR), and what that likely means for the prospects of the company and its stock.

CIBER, Inc. (NYSE:CBR) investors should pay attention to a decrease in support from the world’s most successful money managers recently. CBR was in 7 hedge funds’ portfolios at the end of the third quarter of 2016. There were 10 hedge funds in our database with CBR positions at the end of the previous quarter. At the end of this article we will also compare CBR to other stocks including ADMA Biologics Inc (NASDAQ:ADMA), Harvard Bioscience, Inc. (NASDAQ:HBIO), and Xcel Brands Inc (NASDAQ:XELB) to get a better sense of its popularity.

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Hedge fund activity in CIBER, Inc. (NYSE:CBR)

Heading into the fourth quarter of 2016, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a fall of 30% from one quarter earlier. On the other hand, there were a total of 12 hedge funds with a bullish position in CBR at the beginning of this year. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

CBR Chart

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Royce & Associates, led by Chuck Royce, holds the most valuable position in CIBER, Inc. (NYSE:CBR). Royce & Associates has a $2.4 million position in the stock. The second largest stake is held by Jeffrey E. Eberwein of Lone Star Value Management, with a $1.7 million position; 3.2% of its 13F portfolio is allocated to the stock. Remaining peers with similar optimism consist of D E Shaw, one of the biggest hedge funds in the world, Jim Simons’ Renaissance Technologies and Israel Englander’s Millennium Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Seeing as CIBER, Inc. (NYSE:CBR) has faced declining sentiment from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of money managers that slashed their entire stakes last quarter. At the top of the heap, Benjamin A. Smith’s Laurion Capital Management dumped the biggest position of the “upper crust” of funds tracked by Insider Monkey, valued at an estimated $0.4 million in stock. Peter Rathjens, Bruce Clarke and John Campbell’s fund, Arrowstreet Capital, also dumped its stock, about $0.1 million worth.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as CIBER, Inc. (NYSE:CBR) but similarly valued. These stocks are ADMA Biologics Inc (NASDAQ:ADMA), Harvard Bioscience, Inc. (NASDAQ:HBIO), Xcel Brands Inc (NASDAQ:XELB), and FBR & Co (NASDAQ:FBRC). This group of stocks’ market valuations resemble CBR’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ADMA 6 50046 -2
HBIO 6 6440 -1
XELB 3 9602 -1
FBRC 6 7733 -2

As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $18 million. That figure was $6 million in CBR’s case. ADMA Biologics Inc (NASDAQ:ADMA) is the most popular stock in this table. On the other hand Xcel Brands Inc (NASDAQ:XELB) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks CIBER, Inc. (NYSE:CBR) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

Disclosure: None