Where Do Hedge Funds Stand On Comfort Systems USA, Inc. (FIX)?

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the fourth quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Comfort Systems USA, Inc. (NYSE:FIX) based on that data.

Comfort Systems USA, Inc. (NYSE:FIX) has experienced a decrease in hedge fund sentiment recently. Comfort Systems USA, Inc. (NYSE:FIX) was in 19 hedge funds’ portfolios at the end of March. The all time high for this statistic is 28. There were 20 hedge funds in our database with FIX holdings at the end of December. Our calculations also showed that FIX isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Noam Gottesman GLG Partners

Noam Gottesman of GLG Partners

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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 homepage. Now let’s take a look at the latest hedge fund action surrounding Comfort Systems USA, Inc. (NYSE:FIX).

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

At first quarter’s end, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -5% from the previous quarter. The graph below displays the number of hedge funds with bullish position in FIX over the last 23 quarters. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).

Is FIX A Good Stock To Buy?

More specifically, Royce & Associates was the largest shareholder of Comfort Systems USA, Inc. (NYSE:FIX), with a stake worth $38.3 million reported as of the end of March. Trailing Royce & Associates was Divisar Capital, which amassed a stake valued at $8.5 million. Impax Asset Management, Renaissance Technologies, and GLG Partners 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 Divisar Capital allocated the biggest weight to Comfort Systems USA, Inc. (NYSE:FIX), around 2.88% of its 13F portfolio. Quantinno Capital is also relatively very bullish on the stock, designating 0.71 percent of its 13F equity portfolio to FIX.

Judging by the fact that Comfort Systems USA, Inc. (NYSE:FIX) has faced declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there is a sect of hedge funds who sold off their positions entirely in the first quarter. At the top of the heap, Matthew Hulsizer’s PEAK6 Capital Management said goodbye to the largest stake of all the hedgies followed by Insider Monkey, comprising about $0.3 million in stock, and Paul Tudor Jones’s Tudor Investment Corp was right behind this move, as the fund dumped about $0.2 million worth. These transactions are intriguing to say the least, as total hedge fund interest was cut by 1 funds in the first quarter.

Let’s check out hedge fund activity in other stocks similar to Comfort Systems USA, Inc. (NYSE:FIX). We will take a look at Laureate Education, Inc. (NASDAQ:LAUR), Albany International Corp. (NYSE:AIN), FirstCash, Inc. (NASDAQ:FCFS), Sunstone Hotel Investors Inc (NYSE:SHO), Nu Skin Enterprises, Inc. (NYSE:NUS), Sanmina Corporation (NASDAQ:SANM), and Rush Enterprises, Inc. (NASDAQ:RUSHA). This group of stocks’ market caps match FIX’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
LAUR 21 184412 -7
AIN 12 22018 -1
FCFS 13 100364 -4
SHO 17 121727 1
NUS 19 327670 -3
SANM 16 156709 -3
RUSHA 17 78465 0
Average 16.4 141624 -2.4

View table here if you experience formatting issues.

As you can see these stocks had an average of 16.4 hedge funds with bullish positions and the average amount invested in these stocks was $142 million. That figure was $87 million in FIX’s case. Laureate Education, Inc. (NASDAQ:LAUR) is the most popular stock in this table. On the other hand Albany International Corp. (NYSE:AIN) is the least popular one with only 12 bullish hedge fund positions. Comfort Systems USA, Inc. (NYSE:FIX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FIX is 63.2. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and beat the market again by 7.7 percentage points. Unfortunately FIX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on FIX were disappointed as the stock returned -1.7% since the end of March (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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