World-class money managers like Ken Griffin and Barry Rosenstein only invest their wealthy clients' money after undertaking a rigorous examination of any potential stock. They are particularly successful in this regard when it comes to small-cap stocks, which their peerless research gives them a big information advantage on when it comes to judging their worth. It's not surprising then that they generate their biggest returns from these stocks and invest more of their money in these stocks on average than other investors. It's also not surprising then that we pay close attention to these picks ourselves and have built a market-beating investment strategy around them.
Camden National Corporation (NASDAQ:CAC) has experienced an increase in hedge fund interest in recent months. CAC was in 10 hedge funds' portfolios at the end of June. There were 6 hedge funds in our database with CAC holdings at the end of the previous quarter. Our calculations also showed that CAC 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.
CAC_oct2019
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We're going to take a look at the key hedge fund action regarding Camden National Corporation (NASDAQ:CAC).
How are hedge funds trading Camden National Corporation (NASDAQ:CAC)?
At the end of the second quarter, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 67% from the previous quarter. On the other hand, there were a total of 6 hedge funds with a bullish position in CAC a year ago. With the smart money's sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
Matthew Lindenbaum Basswood Capital
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies has the biggest position in Camden National Corporation (NASDAQ:CAC), worth close to $23.5 million, corresponding to less than 0.1%% of its total 13F portfolio. Coming in second is Chuck Royce of Royce & Associates, with a $23.4 million position; 0.2% of its 13F portfolio is allocated to the stock. Some other professional money managers with similar optimism comprise Matthew Lindenbaum's Basswood Capital, David P. Cohen's Minerva Advisors and Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital.
As industrywide interest jumped, key money managers were leading the bulls' herd. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, initiated the largest position in Camden National Corporation (NASDAQ:CAC). Arrowstreet Capital had $0.5 million invested in the company at the end of the quarter. Ken Griffin's Citadel Investment Group also made a $0.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Peter Muller's PDT Partners and D. E. Shaw's D E Shaw.
Let's also examine hedge fund activity in other stocks similar to Camden National Corporation (NASDAQ:CAC). These stocks are Luxfer Holdings PLC (NYSE:LXFR), Comtech Telecommunications Corp. (NASDAQ:CMTL), Personalis, Inc. (NASDAQ:PSNL), and Cass Information Systems, Inc. (NASDAQ:CASS). This group of stocks' market caps resemble CAC's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LXFR,9,106556,-5 CMTL,17,106760,-3 PSNL,17,83879,17 CASS,11,20185,0 Average,13.5,79345,2.25 [/table]
As you can see these stocks had an average of 13.5 hedge funds with bullish positions and the average amount invested in these stocks was $79 million. That figure was $71 million in CAC's case. Comtech Telecommunications Corp. (NASDAQ:CMTL) is the most popular stock in this table. On the other hand Luxfer Holdings PLC (NYSE:LXFR) is the least popular one with only 9 bullish hedge fund positions. Camden National Corporation (NASDAQ:CAC) 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. 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 CAC wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); CAC investors were disappointed as the stock returned -4.9% 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 so far in 2019.
Disclosure: None. This article was originally published at Insider Monkey.
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