Is CRS A Good Stock To Buy Now?

Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks aren’t doing great but many of the stocks that delivered strong returns since March are still going very strong and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment to Carpenter Technology Corporation (NYSE:CRS) changed recently.

Is CRS a good stock to buy now? Carpenter Technology Corporation (NYSE:CRS) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 16 hedge funds’ portfolios at the end of September. Our calculations also showed that CRS 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). At the end of this article we will also compare CRS to other stocks including Primoris Services Corp (NASDAQ:PRIM), Qiwi PLC (NASDAQ:QIWI), and Dril-Quip, Inc. (NYSE:DRQ) to get a better sense of its popularity.

Video: Watch our video about the top 5 most popular hedge fund stocks.

In today’s marketplace there are several gauges stock traders put to use to grade stocks. A pair of the most innovative gauges are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the top picks of the top fund managers can trounce the broader indices by a healthy amount (see the details here).


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. Now we’re going to view the key hedge fund action surrounding Carpenter Technology Corporation (NYSE:CRS).

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

Heading into the fourth quarter of 2020, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in CRS over the last 21 quarters. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

Is CRS A Good Stock To Buy?

More specifically, D E Shaw was the largest shareholder of Carpenter Technology Corporation (NYSE:CRS), with a stake worth $8.7 million reported as of the end of September. Trailing D E Shaw was Fisher Asset Management, which amassed a stake valued at $8.7 million. Arrowstreet Capital, Renaissance Technologies, and Two Sigma Advisors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Engineers Gate Manager allocated the biggest weight to Carpenter Technology Corporation (NYSE:CRS), around 0.09% of its 13F portfolio. AlphaCrest Capital Management is also relatively very bullish on the stock, dishing out 0.05 percent of its 13F equity portfolio to CRS.

Because Carpenter Technology Corporation (NYSE:CRS) has experienced bearish sentiment from hedge fund managers, logic holds that there was a specific group of fund managers who sold off their entire stakes in the third quarter. It’s worth mentioning that Peter Muller’s PDT Partners sold off the biggest stake of the 750 funds followed by Insider Monkey, comprising an estimated $0.4 million in stock, and Thomas Bailard’s Bailard Inc was right behind this move, as the fund said goodbye to about $0.3 million worth. These transactions are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Carpenter Technology Corporation (NYSE:CRS) but similarly valued. We will take a look at Primoris Services Corp (NASDAQ:PRIM), Qiwi PLC (NASDAQ:QIWI), Dril-Quip, Inc. (NYSE:DRQ), Abercrombie & Fitch Co. (NYSE:ANF), Smith & Wesson Brands, Inc. (NASDAQ:SWBI), Ultra Clean Holdings Inc (NASDAQ:UCTT), and First Busey Corporation (NASDAQ:BUSE). This group of stocks’ market values are closest to CRS’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PRIM 21 76140 2
QIWI 9 48289 2
DRQ 14 60816 4
ANF 27 239985 -7
SWBI 18 103081 -6
UCTT 20 93359 -2
BUSE 15 31527 2
Average 17.7 93314 -0.7

View table here if you experience formatting issues.

As you can see these stocks had an average of 17.7 hedge funds with bullish positions and the average amount invested in these stocks was $93 million. That figure was $45 million in CRS’s case. Abercrombie & Fitch Co. (NYSE:ANF) is the most popular stock in this table. On the other hand Qiwi PLC (NASDAQ:QIWI) is the least popular one with only 9 bullish hedge fund positions. Carpenter Technology Corporation (NYSE:CRS) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CRS is 54.4. 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 gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. A small number of hedge funds were also right about betting on CRS as the stock returned 54.5% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.

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