Like everyone else, elite investors make mistakes. Some of their top consensus picks, such as Micron and Anadarko Petroleum, have not done well during the last 12 months ending in October due to various reasons. Nevertheless, the data show elite investors’ consensus picks have done well on average. The top 30 S&P 500 stocks among hedge funds at the end of September 2014 yielded an average return of 9.5% during the last four quarters ending in October and sixty three percent of these 30 stocks outperformed the market. S&P 500 Index returned only 5.2% during the same period and less than 49% of its constituents managed to beat this return. Because their consensus picks have done well, we pay attention to what elite funds think before doing extensive research on a stock. In this article, we take a closer look at CIBER, Inc. (NYSE:CBR) from the perspective of those elite funds.
CIBER, Inc. (NYSE:CBR) was in 10 hedge funds’ portfolios at the end of September. CBR shareholders have witnessed a decrease in activity from the world’s largest hedge funds lately. There were 11 hedge funds in our database with CBR holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as OraSure Technologies, Inc. (NASDAQ:OSUR), Innocoll AG (NASDAQ:INNL), and Electro Rent Corporation (NASDAQ:ELRC) to gather more data points.
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Now, we’re going to review the recent action surrounding CIBER, Inc. (NYSE:CBR).
Hedge fund activity in CIBER, Inc. (NYSE:CBR)
At Q3’s end, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of -9% from the previous quarter. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Brett Hendrickson’s Nokomis Capital has the most valuable position in CIBER, Inc. (NYSE:CBR), worth close to $10.1 million, accounting for 2.9% of its total 13F portfolio. The second largest stake is held by Chuck Royce of Royce & Associates, with a $8.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining professional money managers with similar optimism include D. E. Shaw’s D E Shaw, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Jim Simons’s Renaissance Technologies.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Coe 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 700+ hedge funds tracked by Insider Monkey identified CBR as a viable investment and initiated a position in the stock.
Let’s check out hedge fund activity in other stocks similar to CIBER, Inc. (NYSE:CBR). These stocks are OraSure Technologies, Inc. (NASDAQ:OSUR), Innocoll AG (NASDAQ:INNL), Electro Rent Corporation (NASDAQ:ELRC), and HENNESS CAPITAL ACQUISITION CORP II (NASDAQ:HCAC). 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 |
|---|---|---|---|
| OSUR | 25 | 38572 | 4 |
| INNL | 5 | 27556 | 0 |
| ELRC | 8 | 21647 | 0 |
| HCAC | 20 | 67730 | 20 |
As you can see these stocks had an average of 14.5 hedge funds with bullish positions and the average amount invested in these stocks was $39 million.That figure was $24 million in CBR’s case. OraSure Technologies, Inc. (NASDAQ:OSUR) is the most popular stock in this table. On the other hand Innocoll AG (NASDAQ:INNL) is the least popular one with only 5 bullish hedge fund positions. CIBER, Inc. (NYSE:CBR) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard OSUR might be a better candidate to consider a long position.
