Is Coca-Cola European Partners plc Ordinary Shares (CCE) A Good Stock To Buy?

We have been waiting for this for a year and finally the third quarter ended up showing a nice bump in the performance of small-cap stocks. Both the S&P 500 and Russell 2000 were up since the end of the second quarter, but small-cap stocks outperformed the large-cap stocks by double digits. This is important for hedge funds, which are big supporters of small-cap stocks, because their investors started pulling some of their capital out due to poor recent performance. It is very likely that equity hedge funds will deliver better risk adjusted returns in the second half of this year. In this article we are going to look at how this recent market trend affected the sentiment of hedge funds towards Coca-Cola European Partners plc Ordinary Shares (NYSE:CCE), and what that likely means for the prospects of the company and its stock.

So, is Coca-Cola European Partners plc Ordinary Shares (NYSE:CCE) a buy here? The smart money is turning less bullish, as the number of long hedge fund positions went down by eight in the third quarter and there were 32 hedge funds in our database with CCE holdings at the end of September. At the end of this article we will also compare CCE to other stocks including Aramark (NYSE:ARMK), Turkcell Iletisim Hizmetleri A.S. (ADR) (NYSE:TKC), and Gartner Inc (NYSE:IT) to get a better sense of its popularity.

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Now, we’re going to view the key action regarding Coca-Cola European Partners plc Ordinary Shares (NYSE:CCE).

Hedge fund activity in Coca-Cola European Partners plc Ordinary Shares (NYSE:CCE)

Heading into the fourth quarter of 2016, a total of 32 of the hedge funds tracked by Insider Monkey were bullish on this stock, down by 20% from the previous quarter. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, JANA Partners, managed by Barry Rosenstein, holds the biggest position in Coca-Cola European Partners plc Ordinary Shares (NYSE:CCE). JANA Partners has a $205.5 million position in the stock, comprising 3.6% of its 13F portfolio. The second largest stake is held by Ricky Sandler’s Eminence Capital, with a $107.6 million position; the fund has 1.8% of its 13F portfolio invested in the stock. Some other professional money managers that are bullish include James Dinan’s York Capital Management, Israel Englander’s Millennium Management and Keith Meister’s Corvex Capital.

SinceCoca-Cola European Partners plc Ordinary Shares (NYSE:CCE) has faced falling interest from hedge fund managers, we can see that there was a specific group of funds that elected to cut their full holdings during the third quarter. Interestingly, First Eagle Investment Management sold off the biggest stake of the 700 funds tracked by Insider Monkey, worth about $183.9 million in stock, and Dan Loeb’s Third Point was right behind this move, as the fund sold off about $96.4 million worth of shares.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Coca-Cola European Partners plc Ordinary Shares (NYSE:CCE) but similarly valued. These stocks are Aramark (NYSE:ARMK), Turkcell Iletisim Hizmetleri A.S. (ADR) (NYSE:TKC), Gartner Inc (NYSE:IT), and Mid America Apartment Communities Inc (NYSE:MAA). All of these stocks’ market caps are similar to CCE’s market cap.

As you can see these stocks had an average of 17 funds with bullish positions at the end of September and the average amount invested in these stocks was $413 million. That figure was $978 million in CCE’s case. Aramark (NYSE:ARMK) is the most popular stock in this table. On the other hand Turkcell Iletisim Hizmetleri A.S. (ADR) (NYSE:TKC) is the least popular one with only five bullish hedge fund positions. Compared to these stocks Coca-Cola European Partners plc Ordinary Shares (NYSE:CCE) 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.