The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on September 30th, about a month before the elections. We at Insider Monkey have made an extensive database of more than 817 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded Clearwater Paper Corp (NYSE:CLW) based on those filings.
Is CLW a good stock to buy now? The best stock pickers were taking a bearish view. The number of long hedge fund positions fell by 1 in recent months. Clearwater Paper Corp (NYSE:CLW) was in 13 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistic is 14. Our calculations also showed that CLW isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). There were 14 hedge funds in our database with CLW holdings at the end of June.
Video: Watch our video about the top 5 most popular hedge fund stocks.
If you'd ask most traders, hedge funds are assumed to be underperforming, outdated financial tools of yesteryear. While there are over 8000 funds trading today, Our researchers look at the bigwigs of this club, approximately 850 funds. It is estimated that this group of investors handle the majority of the smart money's total capital, and by observing their top equity investments, Insider Monkey has spotted several investment strategies that have historically outpaced the broader indices. Insider Monkey's flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
NAVELLIER & ASSOCIATES
Louis Navellier of Navellier & Associates
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. Now we're going to go over the fresh hedge fund action surrounding Clearwater Paper Corp (NYSE:CLW).
Do Hedge Funds Think CLW Is A Good Stock To Buy Now?
At third quarter's end, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of -7% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards CLW over the last 21 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Sabrepoint Capital held the most valuable stake in Clearwater Paper Corp (NYSE:CLW), which was worth $20.2 million at the end of the third quarter. On the second spot was Sabrepoint Capital which amassed $13.8 million worth of shares. Renaissance Technologies, Schonfeld Strategic Advisors, and Arrowstreet Capital 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 Sabrepoint Capital allocated the biggest weight to Clearwater Paper Corp (NYSE:CLW), around 7.21% of its 13F portfolio. Sabrepoint Capital is also relatively very bullish on the stock, earmarking 4.93 percent of its 13F equity portfolio to CLW.
Judging by the fact that Clearwater Paper Corp (NYSE:CLW) has witnessed falling interest from the smart money, it's easy to see that there were a few money managers that elected to cut their positions entirely in the third quarter. It's worth mentioning that D. E. Shaw's D E Shaw cut the biggest position of the 750 funds followed by Insider Monkey, valued at about $0.8 million in stock. Michael Gelband's fund, ExodusPoint Capital, also dumped its stock, about $0.8 million worth. These transactions are interesting, as total hedge fund interest fell by 1 funds in the third quarter.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Clearwater Paper Corp (NYSE:CLW) but similarly valued. These stocks are ImmunoGen, Inc. (NASDAQ:IMGN), Betterware de Mexico, S.A.B. de C.V. (NASDAQ:BWMX), Jumia Technologies AG (NYSE:JMIA), Precigen, Inc. (NASDAQ:PGEN), Global Medical REIT Inc. (NYSE:GMRE), Hyster-Yale Materials Handling Inc (NYSE:HY), and Sportsman's Warehouse Holdings Inc (NASDAQ:SPWH). All of these stocks' market caps are closest to CLW's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position IMGN,18,129732,-2 BWMX,2,4322,0 JMIA,9,13534,1 PGEN,12,36166,-3 GMRE,6,13544,-1 HY,12,31979,1 SPWH,26,118344,-7 Average,12.1,49660,-1.6 [/table]
As you can see these stocks had an average of 12.1 hedge funds with bullish positions and the average amount invested in these stocks was $50 million. That figure was $50 million in CLW's case. Sportsman's Warehouse Holdings Inc (NASDAQ:SPWH) is the most popular stock in this table. On the other hand Betterware de Mexico, S.A.B. de C.V. (NASDAQ:BWMX) is the least popular one with only 2 bullish hedge fund positions. Clearwater Paper Corp (NYSE:CLW) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CLW is 54.8. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and beat the market again by 16.2 percentage points. Unfortunately CLW wasn't nearly as popular as these 20 stocks and hedge funds that were betting on CLW were disappointed as the stock returned -4.2% since the end of September (through 12/8) 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 this year.
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Disclosure: None. This article was originally published at Insider Monkey.
