At Insider Monkey, we pore over the filings of nearly 817 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not Core Laboratories N.V. (NYSE:CLB) makes for a good investment right now.
Is CLB a good stock to buy now? Core Laboratories N.V. (NYSE:CLB) has experienced a decrease in support from the world’s most elite money managers in recent months. Core Laboratories N.V. (NYSE:CLB) was in 16 hedge funds’ portfolios at the end of September. The all time high for this statistic is 25. There were 19 hedge funds in our database with CLB holdings at the end of June. Our calculations also showed that CLB 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 financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
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. Keeping this in mind we’re going to take a glance at the latest hedge fund action surrounding Core Laboratories N.V. (NYSE:CLB).
Do Hedge Funds Think CLB Is A Good Stock To Buy Now?
At Q3’s end, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a change of -16% from one quarter earlier. By comparison, 16 hedge funds held shares or bullish call options in CLB a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Core Laboratories N.V. (NYSE:CLB) was held by Ariel Investments, which reported holding $48.5 million worth of stock at the end of September. It was followed by Ako Capital with a $22.4 million position. Other investors bullish on the company included Fisher Asset Management, Millennium Management, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Ariel Investments allocated the biggest weight to Core Laboratories N.V. (NYSE:CLB), around 0.7% of its 13F portfolio. Ako Capital is also relatively very bullish on the stock, dishing out 0.35 percent of its 13F equity portfolio to CLB.
Because Core Laboratories N.V. (NYSE:CLB) has faced bearish sentiment from the smart money, we can see that there were a few funds who sold off their entire stakes last quarter. Interestingly, Michael Gelband’s ExodusPoint Capital said goodbye to the largest position of the 750 funds followed by Insider Monkey, totaling an estimated $6.9 million in stock. Matt Smith’s fund, Deep Basin Capital, also sold off its stock, about $6.4 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 3 funds last quarter.
Let’s now review hedge fund activity in other stocks similar to Core Laboratories N.V. (NYSE:CLB). We will take a look at Inhibrx, Inc. (NASDAQ:INBX), TCR2 Therapeutics Inc. (NASDAQ:TCRR), Brookfield Property REIT Inc. (NASDAQ:BPYU), Kelly Services, Inc. (NASDAQ:KELYA), Unisys Corporation (NYSE:UIS), MGP Ingredients Inc (NASDAQ:MGPI), and The Shyft Group, Inc. (NASDAQ:SHYF). This group of stocks’ market caps are similar to CLB’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 11.7 hedge funds with bullish positions and the average amount invested in these stocks was $84 million. That figure was $114 million in CLB’s case. Unisys Corporation (NYSE:UIS) is the most popular stock in this table. On the other hand Kelly Services, Inc. (NASDAQ:KELYA) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Core Laboratories N.V. (NYSE:CLB) is more popular among hedge funds. Our overall hedge fund sentiment score for CLB is 71.2. 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. 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 returned 30.7% in 2020 through December 14th but still managed to beat the market by 15.8 percentage points. Hedge funds were also right about betting on CLB as the stock returned 83.9% since the end of September (through 12/14) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.