Is Code Chain New Continent Limited (CCNC) A Good Stock To Buy?

In this article we are going to use hedge fund sentiment as a tool and determine whether Code Chain New Continent Limited (NASDAQ:CCNC) is a good investment right now. We like to analyze hedge fund sentiment before conducting days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.

Is CCNC a good stock to buy? Prominent investors were getting more bullish. The number of bullish hedge fund positions rose by 3 in recent months. Code Chain New Continent Limited (NASDAQ:CCNC) was in 3 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic was previously 1. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that CCNC isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 0 hedge funds in our database with CCNC holdings at the end of December.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $28 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Now we’re going to review the recent hedge fund action surrounding Code Chain New Continent Limited (NASDAQ:CCNC).

Do Hedge Funds Think CCNC Is A Good Stock To Buy Now?

At the end of the first quarter, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of 3 from the fourth quarter of 2020. On the other hand, there were a total of 0 hedge funds with a bullish position in CCNC a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Code Chain New Continent Limited (NASDAQ:CCNC) was held by Renaissance Technologies, which reported holding $0.4 million worth of stock at the end of December. It was followed by Paloma Partners with a $0.2 million position. The only other hedge fund that is bullish on the company was Citadel Investment Group.

Consequently, key money managers have been driving this bullishness. Renaissance Technologies, created the most outsized position in Code Chain New Continent Limited (NASDAQ:CCNC). Renaissance Technologies had $0.4 million invested in the company at the end of the quarter. Donald Sussman’s Paloma Partners also made a $0.2 million investment in the stock during the quarter. The only other fund with a new position in the stock is Ken Griffin’s Citadel Investment Group.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Code Chain New Continent Limited (NASDAQ:CCNC) but similarly valued. We will take a look at Aileron Therapeutics, Inc. (NASDAQ:ALRN), Exela Technologies, Inc. (NASDAQ:XELA), Boxlight Corporation (NASDAQ:BOXL), SELLAS Life Sciences Group, Inc. (NASDAQ:SLS), Phoenix New Media Ltd (NYSE:FENG), VAALCO Energy, Inc. (NYSE:EGY), and PC Tel Inc (NASDAQ:PCTI). All of these stocks’ market caps are similar to CCNC’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $10 million. That figure was $1 million in CCNC’s case. PC Tel Inc (NASDAQ:PCTI) is the most popular stock in this table. On the other hand Boxlight Corporation (NASDAQ:BOXL) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Code Chain New Continent Limited (NASDAQ:CCNC) is even less popular than BOXL. Our overall hedge fund sentiment score for CCNC is 38. 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. Hedge funds dodged a bullet by taking a bearish stance towards CCNC. Our calculations showed that the top 10 most popular hedge fund stocks returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th but managed to beat the market again by 3.3 percentage points. Unfortunately CCNC wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was very bearish); CCNC investors were disappointed as the stock returned -20.1% since the end of the first quarter (through 6/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

Disclosure: None. This article was originally published at Insider Monkey.