Is CRSR 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 Corsair Gaming, Inc. (NASDAQ:CRSR) changed recently.

Is CRSR a good stock to buy now? The best stock pickers were getting more optimistic. The number of long hedge fund positions moved up by 13 lately. Corsair Gaming, Inc. (NASDAQ:CRSR) was in 13 hedge funds’ portfolios at the end of the third quarter of 2020. Our calculations also showed that CRSR 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 today’s marketplace there are plenty of indicators shareholders use to assess stocks. A couple of the less utilized indicators are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the top picks of the best investment managers can outclass the market by a healthy margin (see the details here).

Jeffrey Talpins of Element Capital

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 analyze the recent hedge fund action encompassing Corsair Gaming, Inc. (NASDAQ:CRSR).

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

At Q3’s end, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of 13 from one quarter earlier. The graph below displays the number of hedge funds with bullish position in CRSR over the last 21 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Corsair Gaming, Inc. (NASDAQ:CRSR) was held by Citadel Investment Group, which reported holding $38.1 million worth of stock at the end of September. It was followed by Millennium Management with a $8.5 million position. Other investors bullish on the company included Holocene Advisors, HBK Investments, and Element Capital Management. In terms of the portfolio weights assigned to each position Element Capital Management allocated the biggest weight to Corsair Gaming, Inc. (NASDAQ:CRSR), around 0.64% of its 13F portfolio. Pinz Capital is also relatively very bullish on the stock, earmarking 0.51 percent of its 13F equity portfolio to CRSR.

As one would reasonably expect, key money managers were breaking ground themselves. Citadel Investment Group, managed by Ken Griffin, initiated the most outsized position in Corsair Gaming, Inc. (NASDAQ:CRSR). Citadel Investment Group had $38.1 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $8.5 million position during the quarter. The other funds with new positions in the stock are Brandon Haley’s Holocene Advisors, David Costen Haley’s HBK Investments, and Jeffrey Talpins’s Element Capital Management.

Let’s also examine hedge fund activity in other stocks similar to Corsair Gaming, Inc. (NASDAQ:CRSR). We will take a look at Akcea Therapeutics, Inc. (NASDAQ:AKCA), Rush Enterprises, Inc. (NASDAQ:RUSHA), AdaptHealth Corp. (NASDAQ:AHCO), CryoPort, Inc. (NASDAQ:CYRX), Eldorado Gold Corp (NYSE:EGO), Avis Budget Group Inc. (NASDAQ:CAR), and ServisFirst Bancshares, Inc. (NASDAQ:SFBS). This group of stocks’ market values resemble CRSR’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
AKCA 13 21755 2
RUSHA 17 71980 -1
AHCO 14 251745 2
CYRX 19 162892 7
EGO 15 231959 3
CAR 34 835613 13
SFBS 8 6464 -1
Average 17.1 226058 3.6

View table here if you experience formatting issues.

As you can see these stocks had an average of 17.1 hedge funds with bullish positions and the average amount invested in these stocks was $226 million. That figure was $68 million in CRSR’s case. Avis Budget Group Inc. (NASDAQ:CAR) is the most popular stock in this table. On the other hand ServisFirst Bancshares, Inc. (NASDAQ:SFBS) is the least popular one with only 8 bullish hedge fund positions. Corsair Gaming, Inc. (NASDAQ:CRSR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CRSR is 25.4. 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 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on CRSR as the stock returned 84.6% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.

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