Is CalAmp Corp. (CAMP) A Good Stock To Buy?

Reymerlyn Martin
Updated

Is CalAmp Corp. (NASDAQ:CAMP) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.

Hedge fund interest in CalAmp Corp. (NASDAQ:CAMP) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare CAMP to other stocks including Global Cord Blood Corporation (NYSE:CO), CSW Industrials, Inc. (NASDAQ:CSWI), and Urstadt Biddle Properties Inc (NYSE:UBA) to get a better sense of its popularity.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

MILLENNIUM MANAGEMENT
MILLENNIUM MANAGEMENT

Let's review the fresh hedge fund action encompassing CalAmp Corp. (NASDAQ:CAMP).

What does the smart money think about CalAmp Corp. (NASDAQ:CAMP)?

At the end of the third quarter, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, no change from one quarter earlier. By comparison, 12 hedge funds held shares or bullish call options in CAMP heading into this year. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

CAMP_dec2018
CAMP_dec2018

According to Insider Monkey's hedge fund database, Wilmot B. Harkey and Daniel Mack's Nantahala Capital Management has the biggest position in Bridgepoint Education Inc (NYSE:BPI), worth close to $19.6 million, corresponding to 0.5% of its total 13F portfolio. Coming in second is Jim Simons of Renaissance Technologies, with a $15.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors with similar optimism encompass D. E. Shaw's D E Shaw, Israel Englander's Millennium Management and Cliff Asness's AQR Capital Management.

Since CalAmp Corp. (NASDAQ:CAMP) has experienced bearish sentiment from the aggregate hedge fund industry, it's easy to see that there is a sect of hedge funds that slashed their entire stakes heading into Q3. It's worth mentioning that Dmitry Balyasny's Balyasny Asset Management dropped the largest position of the "upper crust" of funds followed by Insider Monkey, totaling an estimated $1.6 million in stock, and D. E. Shaw's D E Shaw was right behind this move, as the fund cut about $1.6 million worth. These bearish behaviors are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let's now review hedge fund activity in other stocks similar to CalAmp Corp. (NASDAQ:CAMP). These stocks are Global Cord Blood Corporation (NYSE:CO), CSW Industrials, Inc. (NASDAQ:CSWI), Urstadt Biddle Properties Inc (NYSE:UBA), and ADTRAN, Inc. (NASDAQ:ADTN). All of these stocks' market caps match CAMP's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CO,7,31573,-2 CSWI,10,50481,-4 UBA,8,29284,-1 ADTN,8,47655,-4 Average,8.25,39748,-2.75 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 8.25 hedge funds with bullish positions and the average amount invested in these stocks was $40 million. That figure was $63 million in CAMP's case. CSW Industrials, Inc. (NASDAQ:CSWI) is the most popular stock in this table. On the other hand Global Cord Blood Corporation (NYSE:CO) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks CalAmp Corp. (NASDAQ:CAMP) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

Disclosure: None. This article was originally published at Insider Monkey.

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