Is Civeo Corporation (CVEO) A Good Stock To Buy?

“The global economic environment is very favorable for investors. Economies are generally strong, but not too strong. Employment levels are among the strongest for many decades. Interest rates are paused at very low levels, and the risk of significant increases in the medium term seems low. Financing for transactions is freely available to good borrowers, but not in major excess. Covenants are lighter than they were five years ago, but the extreme excesses seen in the past do not seem prevalent yet today. Despite this apparent ‘goldilocks’ market environment, we continue to worry about a world where politics are polarized almost everywhere, interest rates are low globally, and equity valuations are at their peak,” are the words of Brookfield Asset Management. Brookfield was right about politics as stocks experienced their second worst May since the 1960s due to escalation of trade disputes. We pay attention to what hedge funds are doing in a particular stock before considering a potential investment because it works for us. So let’s take a glance at the smart money sentiment towards Civeo Corporation (Canada) (NYSE:CVEO) and see how it was affected.

Is Civeo Corporation (Canada) (NYSE:CVEO) a first-rate investment now? Money managers are in a bearish mood. The number of bullish hedge fund positions were cut by 1 in recent months. Our calculations also showed that CVEO isn’t among the 30 most popular stocks among hedge funds (see the video below). CVEO was in 13 hedge funds’ portfolios at the end of the second quarter of 2019. There were 14 hedge funds in our database with CVEO holdings at the end of the previous quarter.
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to 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 gauges stock traders use to evaluate stocks. A duo of the best gauges are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the best picks of the elite hedge fund managers can trounce their index-focused peers by a superb margin (see the details here).

In addition to following the biggest hedge funds for investment ideas, we also share stock pitches from conferences, investor letters and other sources  like this one where the fund manager is talking about two under the radar 1000% return potential stocks: first one in internet infrastructure and the second in the heart of advertising market. We use hedge fund buy/sell signals to determine whether to conduct in-depth analysis of these stock ideas which take days. We’re going to view the key hedge fund action surrounding Civeo Corporation (Canada) (NYSE:CVEO).

What does smart money think about Civeo Corporation (Canada) (NYSE:CVEO)?

Heading into the third quarter of 2019, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -7% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in CVEO over the last 16 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.


The largest stake in Civeo Corporation (Canada) (NYSE:CVEO) was held by Horizon Asset Management, which reported holding $71 million worth of stock at the end of March. It was followed by Renaissance Technologies with a $14.9 million position. Other investors bullish on the company included Prescott Group Capital Management, Cloverdale Capital Management, and DC Capital Partners.

Due to the fact that Civeo Corporation (Canada) (NYSE:CVEO) has witnessed falling interest from the aggregate hedge fund industry, it’s safe to say that there were a few hedge funds that elected to cut their full holdings heading into Q3. Interestingly, Ken Griffin’s Citadel Investment Group sold off the biggest position of the “upper crust” of funds watched by Insider Monkey, comprising an estimated $0.1 million in stock. Joel Greenblatt’s fund, Gotham Asset Management, also dropped its stock, about $0 million worth. These moves are interesting, as total hedge fund interest was cut by 1 funds heading into Q3.

Let’s now take a look at hedge fund activity in other stocks similar to Civeo Corporation (Canada) (NYSE:CVEO). These stocks are Sutro Biopharma, Inc. (NASDAQ:STRO), Kadmon Holdings, Inc. (NYSE:KDMN), Habit Restaurants Inc (NASDAQ:HABT), and LogicBio Therapeutics, Inc. (NASDAQ:LOGC). All of these stocks’ market caps resemble CVEO’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
STRO 10 51668 1
KDMN 15 116709 0
HABT 12 51066 -2
LOGC 6 128085 0
Average 10.75 86882 -0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 10.75 hedge funds with bullish positions and the average amount invested in these stocks was $87 million. That figure was $117 million in CVEO’s case. Kadmon Holdings, Inc. (NYSE:KDMN) is the most popular stock in this table. On the other hand LogicBio Therapeutics, Inc. (NASDAQ:LOGC) is the least popular one with only 6 bullish hedge fund positions. Civeo Corporation (Canada) (NYSE:CVEO) is not the most popular stock in this group but hedge fund interest is still above average. 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 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately CVEO wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on CVEO were disappointed as the stock returned -26.2% during the third quarter 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.