Where Do Hedge Funds Stand On CSG Systems International, Inc. (CSGS)?

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31st. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards CSG Systems International, Inc. (NASDAQ:CSGS).

Is CSG Systems International, Inc. (NASDAQ:CSGS) a buy, sell, or hold? Prominent investors were turning bullish. The number of long hedge fund positions went up by 1 lately. CSG Systems International, Inc. (NASDAQ:CSGS) was in 23 hedge funds’ portfolios at the end of March. The all time high for this statistic is 23. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that CSGS isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 22 hedge funds in our database with CSGS holdings at the end of December.

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Donald Sussman Paloma Partners

Donald Sussman of Paloma Partners

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

At first quarter’s end, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 5% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CSGS over the last 23 quarters. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).

More specifically, Renaissance Technologies was the largest shareholder of CSG Systems International, Inc. (NASDAQ:CSGS), with a stake worth $59.2 million reported as of the end of March. Trailing Renaissance Technologies was Polar Capital, which amassed a stake valued at $21 million. Value Holdings LP, Arrowstreet Capital, and Citadel Investment Group 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 Value Holdings LP allocated the biggest weight to CSG Systems International, Inc. (NASDAQ:CSGS), around 3.38% of its 13F portfolio. Zebra Capital Management is also relatively very bullish on the stock, setting aside 0.61 percent of its 13F equity portfolio to CSGS.

Now, key money managers have jumped into CSG Systems International, Inc. (NASDAQ:CSGS) headfirst. Tudor Investment Corp, managed by Paul Tudor Jones, initiated the most outsized position in CSG Systems International, Inc. (NASDAQ:CSGS). Tudor Investment Corp had $1.8 million invested in the company at the end of the quarter. Roger Ibbotson’s Zebra Capital Management also initiated a $0.6 million position during the quarter. The other funds with new positions in the stock are Michael Gelband’s ExodusPoint Capital, Donald Sussman’s Paloma Partners, and Qing Li’s Sciencast Management.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as CSG Systems International, Inc. (NASDAQ:CSGS) but similarly valued. These stocks are Studio City International Holdings Limited (NYSE:MSC), DermTech, Inc. (NASDAQ:DMTK), Meta Financial Group Inc. (NASDAQ:CASH), G-III Apparel Group, Ltd. (NASDAQ:GIII), Zymeworks Inc. (NYSE:ZYME), Star Bulk Carriers Corp. (NASDAQ:SBLK), and Arco Platform Limited (NASDAQ:ARCE). This group of stocks’ market values are similar to CSGS’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MSC 3 226997 0
DMTK 18 303148 4
CASH 14 109318 5
GIII 14 90292 -2
ZYME 27 473839 -1
SBLK 13 692200 3
ARCE 8 49651 -7
Average 13.9 277921 0.3

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.9 hedge funds with bullish positions and the average amount invested in these stocks was $278 million. That figure was $142 million in CSGS’s case. Zymeworks Inc. (NYSE:ZYME) is the most popular stock in this table. On the other hand Studio City International Holdings Limited (NYSE:MSC) is the least popular one with only 3 bullish hedge fund positions. CSG Systems International, Inc. (NASDAQ:CSGS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CSGS is 77.7. 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 CSGS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CSGS were disappointed as the stock returned 3.4% 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.