We can judge whether Cass Information Systems, Inc. (NASDAQ:CASS) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market when we factor in known risk factors.
Hedge fund interest in Cass Information Systems, Inc. (NASDAQ:CASS) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Genesco Inc. (NYSE:GCO), Global Partners LP (NYSE:GLP), and Urstadt Biddle Properties Inc. (NYSE:UBP) to gather more data points. Our calculations also showed that CASS 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 today’s marketplace there are several methods market participants have at their disposal to analyze stocks. A couple of the best methods are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the top picks of the elite hedge fund managers can outclass the S&P 500 by a healthy 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 Cass Information Systems, Inc. (NASDAQ:CASS).
What have hedge funds been doing with Cass Information Systems, Inc. (NASDAQ:CASS)?
At Q2’s end, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the first quarter of 2019. On the other hand, there were a total of 9 hedge funds with a bullish position in CASS a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Cass Information Systems, Inc. (NASDAQ:CASS), with a stake worth $5.6 million reported as of the end of March. Trailing Renaissance Technologies was Arrowstreet Capital, which amassed a stake valued at $5.4 million. Royce & Associates, Millennium Management, and Citadel Investment Group were also very fond of the stock, giving the stock large weights in their portfolios.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the second quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Cass Information Systems, Inc. (NASDAQ:CASS) but similarly valued. We will take a look at Genesco Inc. (NYSE:GCO), Global Partners LP (NYSE:GLP), Urstadt Biddle Properties Inc. (NYSE:UBP), and Houghton Mifflin Harcourt Co (NASDAQ:HMHC). This group of stocks’ market values are similar to CASS’s market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GCO,17,55539,-2 GLP,3,1644,-2 UBP,2,12600,0 HMHC,14,201951,-11 Average,9,67934,-3.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $68 million. That figure was $20 million in CASS’s case. Genesco Inc. (NYSE:GCO) is the most popular stock in this table. On the other hand Urstadt Biddle Properties Inc. (NYSE:UBP) is the least popular one with only 2 bullish hedge fund positions. Cass Information Systems, Inc. (NASDAQ:CASS) is not the most popular stock in this group but hedge fund interest is still above average. 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. Hedge funds were also right about betting on CASS as the stock returned 11.9% during the third quarter and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.