In this article we will check out the progression of hedge fund sentiment towards Citizens, Inc. (NYSE:CIA) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Citizens, Inc. (NYSE:CIA) was in 3 hedge funds’ portfolios at the end of March. CIA shareholders have witnessed an increase in enthusiasm from smart money of late. There were 2 hedge funds in our database with CIA positions at the end of the previous quarter. Our calculations also showed that CIA isn’t among the 30 most popular stocks among hedge funds (click for Q1 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 financial world there are several metrics investors put to use to evaluate stocks. Some of the best metrics are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the top picks of the best fund managers can beat the S&P 500 by a very impressive margin (see the details here).
Matthew Hulsizer of PEAK6 Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. We interview hedge fund managers and ask them about their best ideas. You can watch our latest hedge fund manager interview here and find out the name of the large-cap healthcare stock that Sio Capital’s Michael Castor expects to double. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to review the key hedge fund action surrounding Citizens, Inc. (NYSE:CIA).
How are hedge funds trading Citizens, Inc. (NYSE:CIA)?
Heading into the second quarter of 2020, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 50% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CIA over the last 18 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
The largest stake in Citizens, Inc. (NYSE:CIA) was held by Renaissance Technologies, which reported holding $3 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $0.2 million position. The only other hedge fund that is bullish on the company was PEAK6 Capital Management.
As industrywide interest jumped, specific money managers have been driving this bullishness. PDT Partners, managed by Peter Muller, assembled the most outsized position in Citizens, Inc. (NYSE:CIA). PDT Partners had $0.1 million invested in the company at the end of the quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Citizens, Inc. (NYSE:CIA) but similarly valued. We will take a look at Comtech Telecommunications Corp. (NASDAQ:CMTL), Progenics Pharmaceuticals, Inc. (NASDAQ:PGNX), Farmers National Banc Corp (NASDAQ:FMNB), and SiTime Corporation (NASDAQ:SITM). This group of stocks’ market values are closest to CIA’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CMTL | 18 | 50189 | 1 |
| PGNX | 12 | 43464 | 2 |
| FMNB | 9 | 14554 | 0 |
| SITM | 3 | 12026 | -1 |
| Average | 10.5 | 30058 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.5 hedge funds with bullish positions and the average amount invested in these stocks was $30 million. That figure was $3 million in CIA’s case. Comtech Telecommunications Corp. (NASDAQ:CMTL) is the most popular stock in this table. On the other hand SiTime Corporation (NASDAQ:SITM) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Citizens, Inc. (NYSE:CIA) is even less popular than SITM. Hedge funds dodged a bullet by taking a bearish stance towards CIA. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 7.9% in 2020 through May 22nd but managed to beat the market by 15.6 percentage points. Unfortunately CIA wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); CIA investors were disappointed as the stock returned -8.3% during the second quarter (through May 22nd) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.
Disclosure: None. This article was originally published at Insider Monkey.
