With the third-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 fourth quarter. One of these stocks was Constellation Brands, Inc. (NYSE:STZ).
Constellation Brands, Inc. (NYSE:STZ) shareholders have witnessed an increase in hedge fund interest lately. STZ was in 64 hedge funds’ portfolios at the end of the third quarter of 2015. There were 62 hedge funds in our database with STZ positions at the end of the previous quarter. At the end of this article we will also compare STZ to other stocks, including ICICI Bank Limited (ADR) (NYSE:IBN), Deere & Company (NYSE:DE), and TE Connectivity Ltd. (NYSE:TEL) to get a better sense of its popularity.
Follow Constellation Brands Inc. (NYSE:STZ)
Follow Constellation Brands Inc. (NYSE:STZ)
According to most investors, hedge funds are assumed to be unimportant, outdated financial tools of yesteryear. While there are more than 8000 funds trading today, Our researchers look at the crème de la crème of this club, about 700 funds. Most estimates calculate that this group of people control bulk of the hedge fund industry’s total asset base, and by tailing their top stock picks, Insider Monkey has come up with a few investment strategies that have historically outpaced Mr. Market. Insider Monkey’s small-cap hedge fund strategy outstripped the S&P 500 index by 12 percentage points a year for a decade in their back tests.
Now, we’re going to take a glance at the fresh action encompassing Constellation Brands, Inc. (NYSE:STZ).
What have hedge funds been doing with Constellation Brands, Inc. (NYSE:STZ)?
At the end of the third quarter, a total of 64 of the hedge funds tracked by Insider Monkey held long positions in this stock, inching up by 3% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Kensico Capital, managed by Michael Lowenstein, holds the largest position in Constellation Brands, Inc. (NYSE:STZ). According to its latest quarterly report, the fund has an $829.9 million position in the stock, comprising 17.5% of its 13F portfolio. Sitting at the No. 2 spot is Stephen Mandel of Lone Pine Capital, with a $586.5 million position; 2.4% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that hold long positions consist of Boykin Curry’s Eagle Capital Management, Alan Fournier’s Pennant Capital Management and Dan Loeb’s Third Point.
Now, key hedge funds were leading the bulls’ herd. Lone Pine Capital, managed by Stephen Mandel, assembled the largest position in Constellation Brands, Inc. (NYSE:STZ), worth $586.5 million as previously stated. David Gallo’s Valinor Management LLC also initiated a $103.3 million position during the quarter. The following funds were also among the new STZ investors: J Kevin Kenny Jr’s Emerging Sovereign Group, Dmitry Balyasny’s Balyasny Asset Management, and David Harding’s Winton Capital Management.
Let’s now review hedge fund activity in other stocks similar to Constellation Brands, Inc. (NYSE:STZ). These stocks are ICICI Bank Limited (ADR) (NYSE:IBN), Deere & Company (NYSE:DE), TE Connectivity Ltd. (NYSE:TEL), and Eaton Corp plc (NYSE:ETN). This group of stocks’ market valuations match STZ’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| IBN | 34 | 439241 | 5 |
| DE | 35 | 2636569 | 4 |
| TEL | 28 | 1265394 | -10 |
| ETN | 41 | 985054 | -5 |
As you can see these stocks had an average of 35 hedge funds with bullish positions and the average amount invested in these stocks was $1.33 billion. That figure was a whooping $4.87 billion in STZ’s case. Eaton Corp plc (NYSE:ETN) is the most popular stock in this table, while TE Connectivity Ltd. (NYSE:TEL) is the laggard with only 28 bullish hedge fund positions. With 64 long hedge fund positions Constellation Brands, Inc. (NYSE:STZ) clearly steals the show. 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.
