The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. We are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article we look at how hedge funds traded Caesars Entertainment Corp (NASDAQ:CZR) and determine whether the smart money was really smart about this stock.
Caesars Entertainment Corp (NASDAQ:CZR) investors should be aware of an increase in hedge fund sentiment of late. Our calculations also showed that CZR isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Today there are numerous gauges market participants use to evaluate publicly traded companies. Some of the most innovative gauges are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best hedge fund managers can outperform the market by a very impressive margin (see the details here).
Noam Gottesman of GLG Partners
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, this trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost gold prices. So, we are checking out this junior gold mining stock. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to analyze the latest hedge fund action encompassing Caesars Entertainment Corp (NASDAQ:CZR).
What does smart money think about Caesars Entertainment Corp (NASDAQ:CZR)?
Heading into the second quarter of 2020, a total of 47 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 2% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CZR over the last 18 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Caesars Entertainment Corp (NASDAQ:CZR) was held by Icahn Capital LP, which reported holding $772.3 million worth of stock at the end of September. It was followed by Canyon Capital Advisors with a $306.6 million position. Other investors bullish on the company included Falcon Edge Capital, Oaktree Capital Management, and HG Vora Capital Management. In terms of the portfolio weights assigned to each position Falcon Edge Capital allocated the biggest weight to Caesars Entertainment Corp (NASDAQ:CZR), around 12.52% of its 13F portfolio. Canyon Capital Advisors is also relatively very bullish on the stock, earmarking 10.83 percent of its 13F equity portfolio to CZR.
As one would reasonably expect, key money managers were breaking ground themselves. HG Vora Capital Management, managed by Parag Vora, established the most outsized position in Caesars Entertainment Corp (NASDAQ:CZR). HG Vora Capital Management had $101.4 million invested in the company at the end of the quarter. Simon Davies’s Sand Grove Capital Partners also made a $58.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Carl Tiedemann and Michael Tiedemann’s TIG Advisors, Steven Clark’s Omni Partners, and Steve Cohen’s Point72 Asset Management.
Let’s now take a look at hedge fund activity in other stocks similar to Caesars Entertainment Corp (NASDAQ:CZR). These stocks are HD Supply Holdings Inc (NASDAQ:HDS), Euronet Worldwide, Inc. (NASDAQ:EEFT), Enel Chile S.A. (NYSE:ENIC), and Forty Seven, Inc. (NASDAQ:FTSV). This group of stocks’ market values are similar to CZR’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HDS | 40 | 856283 | 2 |
| EEFT | 30 | 240212 | -17 |
| ENIC | 8 | 17690 | 2 |
| FTSV | 40 | 1084502 | 22 |
| Average | 29.5 | 549672 | 2.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.5 hedge funds with bullish positions and the average amount invested in these stocks was $550 million. That figure was $2041 million in CZR’s case. HD Supply Holdings Inc (NASDAQ:HDS) is the most popular stock in this table. On the other hand Enel Chile S.A. (NYSE:ENIC) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Caesars Entertainment Corp (NASDAQ:CZR) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks returned 12.3% in 2020 through June 30th but still managed to beat the market by 15.5 percentage points. Hedge funds were also right about betting on CZR as the stock returned 79.4% in Q2 and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
