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Why Computer Sciences Corporation (CSC)’s Stock Surged Today?

Judging by the fact that Computer Sciences Corporation (NYSE:CSC) has experienced falling interest from the aggregate hedge fund industry, we can see that there were a few hedge funds who were dropping their full holdings in the fourth quarter. At the top of the heap, Nick Niell’s Arrowgrass Capital Partners dropped the largest stake of the 700 funds tracked by Insider Monkey, totaling an estimated $19.9 million in stock, and Howard Shainker and Akiva Katz’s Bow Street LLC was right behind this move, as the fund dropped about $12.5 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by six funds in the fourth quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Computer Sciences Corporation (NYSE:CSC) but similarly valued. We will take a look at Sally Beauty Holdings, Inc. (NYSE:SBH), B/E Aerospace Inc (NASDAQ:BEAV), Tyler Technologies, Inc. (NYSE:TYL), and AMC Networks Inc (NASDAQ:AMCX). This group of stocks’ market valuations are similar to CSC’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SBH 22 327214 -1
BEAV 36 1065955 -8
TYL 15 113474 -1
AMCX 26 355015 0

As you can see these stocks had an average of 24.75 hedge funds with bullish positions and the average amount invested in these stocks was $465 million. That figure was $677 million in CSC’s case. B/E Aerospace Inc (NASDAQ:BEAV) is the most popular stock in this table. On the other hand, Tyler Technologies, Inc. (NYSE:TYL) is the least popular one with only 15 bullish hedge fund positions. Computer Sciences Corporation (NYSE:CSC) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard BEAV might be a better candidate to consider a long position.

Disclosure: None

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