Is CVB Financial Corp. (CVBF) A Good Stock To Buy?

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We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: PEAK6 Capital Management. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically, a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case here because only one of the 700+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Fisher Asset Management).

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as CVB Financial Corp. (NASDAQ:CVBF) but similarly valued. We will take a look at Selective Insurance Group (NASDAQ:SIGI), Matador Resources Co (NYSE:MTDR), Delek US Holdings, Inc. (NYSE:DK), and Chimerix Inc (NASDAQ:CMRX). This group of stocks’ market valuations are similar to CVB Financial Corp. (NASDAQ:CVBF)’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SIGI 19 44085 3
MTDR 10 44780 -3
DK 30 513168 6
CMRX 17 206603 -4

As you can see, these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $202 million. That figure was $11 million in CVB Financial Corp. (NASDAQ:CVBF)’s case. Delek US Holdings, Inc. (NYSE:DK) is the most popular stock in this table. On the other hand, Matador Resources Co (NYSE:MTDR) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks, CVB Financial Corp. (NASDAQ:CVBF) is even less popular than Matador Resources Co (NYSE:MTDR). Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case, more research is warranted.

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