With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter of 2021. One of these stocks was Citizens & Northern Corporation (NASDAQ:CZNC).
Citizens & Northern Corporation (NASDAQ:CZNC) has seen a decrease in hedge fund interest recently. Citizens & Northern Corporation (NASDAQ:CZNC) was in 3 hedge funds' portfolios at the end of March. The all time high for this statistic is 4. There were 4 hedge funds in our database with CZNC holdings at the end of December. Our calculations also showed that CZNC isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Ken Griffin of Citadel Investment Group
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Do Hedge Funds Think CZNC Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -25% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CZNC over the last 23 quarters. With the smart money's sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
The largest stake in Citizens & Northern Corporation (NASDAQ:CZNC) was held by Renaissance Technologies, which reported holding $2.7 million worth of stock at the end of December. It was followed by Minerva Advisors with a $1 million position. The only other hedge fund that is bullish on the company was Citadel Investment Group.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Millennium Management. One hedge fund selling its entire position doesn't always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don't think this is the case in this case because none of the 750+ hedge funds tracked by Insider Monkey identified CZNC as a viable investment and initiated a position in the stock.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Citizens & Northern Corporation (NASDAQ:CZNC) but similarly valued. These stocks are CapStar Financial Holdings, Inc. (NASDAQ:CSTR), Aurora Mobile Limited (NASDAQ:JG), SQZ Biotechnologies Company (NYSE:SQZ), Lineage Cell Therapeutics, Inc. (NYSE:LCTX), Fidus Investment Corp (NASDAQ:FDUS), CalAmp Corp. (NASDAQ:CAMP), and Aeglea BioTherapeutics, Inc. (NASDAQ:AGLE). This group of stocks' market values are similar to CZNC's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CSTR,12,21655,5 JG,6,2665,3 SQZ,9,41439,5 LCTX,12,89089,1 FDUS,5,9758,1 CAMP,11,248319,0 AGLE,18,153254,0 Average,10.4,80883,2.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.4 hedge funds with bullish positions and the average amount invested in these stocks was $81 million. That figure was $4 million in CZNC's case. Aeglea BioTherapeutics, Inc. (NASDAQ:AGLE) is the most popular stock in this table. On the other hand Fidus Investment Corp (NASDAQ:FDUS) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Citizens & Northern Corporation (NASDAQ:CZNC) is even less popular than FDUS. Our overall hedge fund sentiment score for CZNC is 26.5. 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. Hedge funds dodged a bullet by taking a bearish stance towards CZNC. Our calculations showed that the top 10 most popular hedge fund stocks returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th but managed to beat the market again by 3.3 percentage points. Unfortunately CZNC wasn't nearly as popular as these 5 stocks (hedge fund sentiment was very bearish); CZNC investors were disappointed as the stock returned 6.3% since the end of the first quarter (through 6/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.