Were Hedge Funds Right About Souring On Commercial Vehicle Group, Inc. (CVGI)?

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended June 28, so let’s proceed with the discussion of the hedge fund sentiment on Commercial Vehicle Group, Inc. (NASDAQ:CVGI).

Commercial Vehicle Group, Inc. (NASDAQ:CVGI) was in 13 hedge funds’ portfolios at the end of the second quarter of 2019. CVGI has seen a decrease in hedge fund interest recently. There were 14 hedge funds in our database with CVGI positions at the end of the previous quarter. Our calculations also showed that CVGI isn’t among the 30 most popular stocks among hedge funds (see the video below).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Chuck Royce

In addition to following the biggest hedge funds for investment ideas, we also share stock pitches from conferences, investor letters and other sources  like this one where the fund manager is talking about two under the radar 1000% return potential stocks: first one in internet infrastructure and the second in the heart of advertising market. We use hedge fund buy/sell signals to determine whether to conduct in-depth analysis of these stock ideas which take days. Let’s go over the fresh hedge fund action encompassing Commercial Vehicle Group, Inc. (NASDAQ:CVGI).

How have hedgies been trading Commercial Vehicle Group, Inc. (NASDAQ:CVGI)?

At Q2’s end, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -7% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in CVGI over the last 16 quarters. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).

No of Hedge Funds with CVGI Positions

More specifically, Royce & Associates was the largest shareholder of Commercial Vehicle Group, Inc. (NASDAQ:CVGI), with a stake worth $17.3 million reported as of the end of March. Trailing Royce & Associates was Renaissance Technologies, which amassed a stake valued at $16.9 million. DC Capital Partners, AQR Capital Management, and D E Shaw were also very fond of the stock, giving the stock large weights in their portfolios.

Due to the fact that Commercial Vehicle Group, Inc. (NASDAQ:CVGI) has witnessed falling interest from the aggregate hedge fund industry, we can see that there were a few hedgies who were dropping their entire stakes in the second quarter. At the top of the heap, Paul Marshall and Ian Wace’s Marshall Wace LLP dropped the largest position of the 750 funds monitored by Insider Monkey, valued at an estimated $0.3 million in stock. Thomas Bailard’s fund, Bailard Inc, also dropped its stock, about $0.2 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 1 funds in the second quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Commercial Vehicle Group, Inc. (NASDAQ:CVGI) but similarly valued. We will take a look at Sonim Technologies, Inc. (NASDAQ:SONM), Advanced Emissions Solutions, Inc. (NASDAQ:ADES), Cincinnati Bell Inc. (NYSE:CBB), and Great Panther Mining Limited (NYSE:GPL). This group of stocks’ market values are closest to CVGI’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SONM 8 61604 8
ADES 8 35538 2
CBB 11 24436 -1
GPL 5 4096 -1
Average 8 31419 2

View table here if you experience formatting issues.

As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $31 million. That figure was $51 million in CVGI’s case. Cincinnati Bell Inc. (NYSE:CBB) is the most popular stock in this table. On the other hand Great Panther Mining Limited (NYSE:GPL) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Commercial Vehicle Group, Inc. (NASDAQ:CVGI) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately CVGI wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on CVGI were disappointed as the stock returned -10.1% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market in Q3.

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