Here is What Hedge Funds Think About Calavo Growers, Inc. (CVGW)

Nina Todic

Sun, Oct 27, 2019, 8:55 PM

We are still in an overall bull market and many stocks that smart money investors were piling into surged through October 17th. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 45% and 39% respectively. Hedge funds' top 3 stock picks returned 34.4% this year and beat the S&P 500 ETFs by 13 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That's why we believe it isn't a waste of time to check out hedge fund sentiment before you invest in a stock like Calavo Growers, Inc. (NASDAQ:CVGW).

Calavo Growers, Inc. (NASDAQ:CVGW) investors should be aware of an increase in support from the world's most elite money managers in recent months. CVGW was in 15 hedge funds' portfolios at the end of the second quarter of 2019. There were 12 hedge funds in our database with CVGW positions at the end of the previous quarter. Our calculations also showed that CVGW isn't among the 30 most popular stocks among hedge funds (see the video below).

Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

In the 21st century investor’s toolkit there are a large number of tools investors can use to analyze their holdings. Some of the less known tools are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the best picks of the top hedge fund managers can outperform the broader indices by a significant amount (see the details here).

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 peek at the latest hedge fund action regarding Calavo Growers, Inc. (NASDAQ:CVGW).

How are hedge funds trading Calavo Growers, Inc. (NASDAQ:CVGW)?

Heading into the third quarter of 2019, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of 25% from the first quarter of 2019. The graph below displays the number of hedge funds with bullish position in CVGW over the last 16 quarters. With hedgies' sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Amy Minella's Cardinal Capital has the biggest position in Calavo Growers, Inc. (NASDAQ:CVGW), worth close to $24 million, comprising 0.8% of its total 13F portfolio. On Cardinal Capital's heels is Renaissance Technologies, with a $11.2 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors that are bullish comprise Matthew Hulsizer's PEAK6 Capital Management, Peter Algert and Kevin Coldiron's Algert Coldiron Investors and Joseph A. Jolson's Harvest Capital Strategies.

As aggregate interest increased, key money managers have jumped into Calavo Growers, Inc. (NASDAQ:CVGW) headfirst. Algert Coldiron Investors, managed by Peter Algert and Kevin Coldiron, established the biggest position in Calavo Growers, Inc. (NASDAQ:CVGW). Algert Coldiron Investors had $1.6 million invested in the company at the end of the quarter. Dmitry Balyasny's Balyasny Asset Management also initiated a $0.9 million position during the quarter. The other funds with brand new CVGW positions are Michael Gelband's ExodusPoint Capital, Hoon Kim's Quantinno Capital, and Steve Cohen's Point72 Asset Management.

Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Calavo Growers, Inc. (NASDAQ:CVGW) but similarly valued. These stocks are Bloomin' Brands Inc (NASDAQ:BLMN), Kontoor Brands, Inc. (NYSE:KTB), Cision Ltd. (NYSE:CISN), and Saia Inc (NASDAQ:SAIA). This group of stocks' market valuations are similar to CVGW's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BLMN,22,111584,-2 KTB,13,106850,13 CISN,21,102631,4 SAIA,9,63027,-5 Average,16.25,96023,2.5 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 16.25 hedge funds with bullish positions and the average amount invested in these stocks was $96 million. That figure was $46 million in CVGW's case. Bloomin' Brands Inc (NASDAQ:BLMN) is the most popular stock in this table. On the other hand Saia Inc (NASDAQ:SAIA) is the least popular one with only 9 bullish hedge fund positions. Calavo Growers, Inc. (NASDAQ:CVGW) 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 CVGW wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); CVGW investors were disappointed as the stock returned -1.6% 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.

Related Content