Coca-Cola Bottling Co. Consolidated (COKE): Are Hedge Funds Right About This Stock?

Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.

Coca-Cola Bottling Co. Consolidated (NASDAQ:COKE) shareholders have witnessed a decrease in hedge fund sentiment of late. 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 Parkway Properties Inc (NYSE:PKY), Media General, Inc. (NYSE:MEG), and MKS Instruments, Inc. (NASDAQ:MKSI) to gather more data points.

Now, we’re going to take a peek at the new action encompassing Coca-Cola Bottling Co. Consolidated (NASDAQ:COKE).

Hedge fund activity in Coca-Cola Bottling Co. Consolidated (NASDAQ:COKE)

Heading into Q4, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a change of -13% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Jim Simons’s Renaissance Technologies has the most valuable position in Coca-Cola Bottling Co. Consolidated (NASDAQ:COKE), worth close to $47.3 million, accounting for 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which holds a $2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that hold long positions encompass Richard Driehaus’s Driehaus Capital, Cliff Asness’s AQR Capital Management and Peter Muller’s PDT Partners.

Due to the fact that Coca-Cola Bottling Co. Consolidated (NASDAQ:COKE) has witnessed falling interest from hedge fund managers, we can see that there is a sect of funds that elected to cut their positions entirely last quarter. Intriguingly, Roger Ibbotson’s Zebra Capital Management dumped the biggest stake of the 700 funds tracked by Insider Monkey, comprising an estimated $0.6 million in stock, and Chao Ku’s Nine Chapters Capital Management was right behind this move, as the fund dropped about $0.5 million worth. These transactions are important to note, as total hedge fund interest dropped by 1 funds last quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Coca-Cola Bottling Co. Consolidated (NASDAQ:COKE) but similarly valued. These stocks are Parkway Properties Inc (NYSE:PKY), Media General, Inc. (NYSE:MEG), MKS Instruments, Inc. (NASDAQ:MKSI), and Lexmark International Inc (NYSE:LXK). This group of stocks’ market valuations match COKE’s market valuation.

As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $320 million. That figure was $53 million in COKE’s case. Media General, Inc. (NYSE:MEG) is the most popular stock in this table. On the other hand Parkway Properties Inc (NYSE:PKY) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Coca-Cola Bottling Co. Consolidated (NASDAQ:COKE) is even less popular than PKY. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.