Reputable billionaire investors such as Nelson Peltz and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won’t accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.
Is Core Laboratories N.V. (NYSE:CLB) worth your attention right now? The smart money is becoming more confident. The number of bullish hedge fund bets went up by 1 in recent months. CLB was in 22 hedge funds’ portfolios at the end of September. There were 21 hedge funds in our database with CLB holdings at the end of the previous quarter. At the end of this article we will also compare CLB to other stocks including Douglas Emmett, Inc. (NYSE:DEI), Brown & Brown, Inc. (NYSE:BRO), and Service Corporation International (NYSE:SCI) to get a better sense of its popularity.
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What does the smart money think about Core Laboratories N.V. (NYSE:CLB)?
At the end of the third quarter, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a 5% boost from the second quarter of 2016, as smart money ownership breaks through to a yearly high. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Ariel Investments, managed by John W. Rogers, holds the largest position in Core Laboratories N.V. (NYSE:CLB). Ariel Investments has a $29.5 million position in the stock. Coming in second is Renaissance Technologies, led by Jim Simons, holding a $24.9 million position. Remaining hedge funds and institutional investors with similar optimism comprise Craig C. Albert’s Sheffield Asset Management, Tom Gayner’s Markel Gayner Asset Management and Cliff Asness’ AQR Capital Management.
Consequently, key hedge funds were leading the bulls’ herd. Millennium Management, managed by Israel Englander, established the most valuable position in Core Laboratories N.V. (NYSE:CLB). Millennium Management had $7.5 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $2.5 million position during the quarter. The following funds were also among the new CLB investors: Noam Gottesman’s GLG Partners, Glenn Russell Dubin’s Highbridge Capital Management, and Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Core Laboratories N.V. (NYSE:CLB) but similarly valued. We will take a look at Douglas Emmett, Inc. (NYSE:DEI), Brown & Brown, Inc. (NYSE:BRO), Service Corporation International (NYSE:SCI), and Empire State Realty Trust Inc (NYSE:ESRT). This group of stocks’ market caps are closest to CLB’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $232 million. That figure was $145 million in CLB’s case. Service Corporation International (NYSE:SCI) is the most popular stock in this table. On the other hand Douglas Emmett, Inc. (NYSE:DEI) is the least popular one with only 5 bullish hedge fund positions. Core Laboratories N.V. (NYSE:CLB) 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. In this regard SCI might be a better candidate to consider a long position in.