Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those elite funds in these small-cap stocks. In the following paragraphs, we analyze Crane Co. (NYSE:CR) from the perspective of those elite funds.
Is Crane Co. (NYSE:CR) worth your attention right now? The smart money is in an optimistic mood. The number of bullish hedge fund bets rose by 4 lately. CR was in 24 hedge funds’ portfolios at the end of September. There were 20 hedge funds in our database with CR holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Wayfair Inc (NYSE:W), Hill-Rom Holdings, Inc. (NYSE:HRC), and Aspen Technology, Inc. (NASDAQ:AZPN) to gather more data points.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
What does the smart money think about Crane Co. (NYSE:CR)?
Heading into the fourth quarter of 2016, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a 20% jump from one quarter earlier, after ownership had remained nearly perfectly flat for 3 quarters. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Mario Gabelli’s GAMCO Investors has the number one position in Crane Co. (NYSE:CR), worth close to $175.1 million, corresponding to 1.1% of its total 13F portfolio. On GAMCO Investors’s heels is AQR Capital Management, managed by Cliff Asness, which holds a $58.8 million position. Remaining professional money managers that hold long positions encompass Israel Englander’s Millennium Management, D E Shaw, and Tom Russo’s Gardner Russo & Gardner.
As one would reasonably expect, key money managers have been driving this bullishness. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, created the biggest position in Crane Co. (NYSE:CR). Arrowstreet Capital had $1.2 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also initiated a $1.2 million position during the quarter. The other funds with new positions in the stock are Matthew Tewksbury’s Stevens Capital Management, Ken Griffin’s Citadel Investment Group, and Chao Ku’s Nine Chapters Capital Management.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Crane Co. (NYSE:CR) but similarly valued. These stocks are Wayfair Inc (NYSE:W), Hill-Rom Holdings, Inc. (NYSE:HRC), Aspen Technology, Inc. (NASDAQ:AZPN), and Cypress Semiconductor Corporation (NASDAQ:CY). This group of stocks’ market caps resemble CR’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 27.25 hedge funds with bullish positions and the average amount invested in these stocks was $421 million. That figure was $297 million in CR’s case. Hill-Rom Holdings, Inc. (NYSE:HRC) is the most popular stock in this table. On the other hand Aspen Technology, Inc. (NASDAQ:AZPN) is the least popular one with only 17 bullish hedge fund positions. Crane Co. (NYSE:CR) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard HRC might be a better candidate to consider a long position in.