As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the fourth quarter of 2019. A significant number of hedge funds continued their strong performance in 2020 and 2021 as well. We get to see hedge funds' thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Cornerstone Building Brands, Inc. (NYSE:CNR).
Is Cornerstone Building Brands, Inc. (NYSE:CNR) ready to rally soon? Hedge funds were betting on the stock. The number of long hedge fund bets moved up by 5 lately. Cornerstone Building Brands, Inc. (NYSE:CNR) was in 27 hedge funds' portfolios at the end of March. The all time high for this statistic is 28. Our calculations also showed that CNR isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 22 hedge funds in our database with CNR holdings at the end of December.
Today there are a multitude of signals shareholders use to size up publicly traded companies. A duo of the best signals are hedge fund and insider trading moves. We have shown that, historically, those who follow the best picks of the top hedge fund managers can outclass the broader indices by a very impressive margin (see the details here). Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Dmitry Balyasny of Balyasny Asset Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Keeping this in mind we're going to take a peek at the fresh hedge fund action encompassing Cornerstone Building Brands, Inc. (NYSE:CNR).
Do Hedge Funds Think CNR Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 27 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 23% from the fourth quarter of 2020. The graph below displays the number of hedge funds with bullish position in CNR over the last 23 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Guardian Point Capital held the most valuable stake in Cornerstone Building Brands, Inc. (NYSE:CNR), which was worth $28.1 million at the end of the fourth quarter. On the second spot was CaaS Capital which amassed $25.2 million worth of shares. Renaissance Technologies, Millennium Management, and Coliseum 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 Guardian Point Capital allocated the biggest weight to Cornerstone Building Brands, Inc. (NYSE:CNR), around 7.04% of its 13F portfolio. Covalent Capital Partners is also relatively very bullish on the stock, dishing out 4.15 percent of its 13F equity portfolio to CNR.
Consequently, key hedge funds were leading the bulls' herd. CaaS Capital, managed by Frank Fu, established the most outsized position in Cornerstone Building Brands, Inc. (NYSE:CNR). CaaS Capital had $25.2 million invested in the company at the end of the quarter. John Bader's Halcyon Asset Management also made a $6.7 million investment in the stock during the quarter. The other funds with brand new CNR positions are Brian J. Higgins's King Street Capital, Travis Cocke's Voss Capital, and Dmitry Balyasny's Balyasny Asset Management.
Let's now review hedge fund activity in other stocks similar to Cornerstone Building Brands, Inc. (NYSE:CNR). We will take a look at EnPro Industries, Inc. (NYSE:NPO), Heska Corp (NASDAQ:HSKA), Five Prime Therapeutics Inc (NASDAQ:FPRX), Community Health Systems, Inc. (NYSE:CYH), Cardtronics plc (NASDAQ:CATM), Cerevel Therapeutics Holdings, Inc. (NASDAQ:CERE), and Core-Mark Holding Company, Inc. (NASDAQ:CORE). This group of stocks' market values are similar to CNR's market value.
[table]Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF PositionNPO,17,213801,3HSKA,28,283963,11FPRX,29,719407,4CYH,21,401413,-5CATM,23,624327,0CERE,22,210033,0CORE,15,73163,-2Average,22.1,360872,1.6[/table]
As you can see these stocks had an average of 22.1 hedge funds with bullish positions and the average amount invested in these stocks was $361 million. That figure was $170 million in CNR's case. Five Prime Therapeutics Inc (NASDAQ:FPRX) is the most popular stock in this table. On the other hand Core-Mark Holding Company, Inc. (NASDAQ:CORE) is the least popular one with only 15 bullish hedge fund positions. Cornerstone Building Brands, Inc. (NYSE:CNR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CNR is 81.8. 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. 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 24% in 2021 through July 9th and still beat the market by 6.7 percentage points. Hedge funds were also right about betting on CNR as the stock returned 23.4% since the end of Q1 (through 7/9) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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