We know that hedge funds generate strong, risk-adjusted returns over the long run, which is why imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, professional investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do. However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, let’s examine the smart money sentiment towards The Chemours Company (NYSE:CC) and determine whether hedge funds skillfully traded this stock.
The Chemours Company (NYSE:CC) was in 38 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 44. CC investors should pay attention to an increase in enthusiasm from smart money lately. There were 24 hedge funds in our database with CC positions at the end of the second quarter. Our calculations also showed that CC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now we’re going to check out the latest hedge fund action regarding The Chemours Company (NYSE:CC).
Do Hedge Funds Think CC Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 38 of the hedge funds tracked by Insider Monkey were long this stock, a change of 58% from the previous quarter. By comparison, 28 hedge funds held shares or bullish call options in CC a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Sessa Capital, managed by John Petry, holds the biggest position in The Chemours Company (NYSE:CC). Sessa Capital has a $258 million position in the stock, comprising 12.7% of its 13F portfolio. The second largest stake is held by David Einhorn of Greenlight Capital, with a $67.5 million position; the fund has 4.5% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors with similar optimism comprise Bill Miller’s Miller Value Partners, Jonathan Barrett and Paul Segal’s Luminus Management and Israel Englander’s Millennium Management. In terms of the portfolio weights assigned to each position Sessa Capital allocated the biggest weight to The Chemours Company (NYSE:CC), around 12.68% of its 13F portfolio. Brightline Capital is also relatively very bullish on the stock, designating 9.67 percent of its 13F equity portfolio to CC.
As one would reasonably expect, some big names have been driving this bullishness. Renaissance Technologies, initiated the most outsized position in The Chemours Company (NYSE:CC). Renaissance Technologies had $15.6 million invested in the company at the end of the quarter. Phill Gross and Robert Atchinson’s Adage Capital Management also initiated a $14.5 million position during the quarter. The other funds with new positions in the stock are Dmitry Balyasny’s Balyasny Asset Management, Zilvinas Mecelis’s Covalis Capital, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Let’s go over hedge fund activity in other stocks similar to The Chemours Company (NYSE:CC). We will take a look at National Fuel Gas Company (NYSE:NFG), Adaptive Biotechnologies Corporation (NASDAQ:ADPT), Dada Nexus Limited (NASDAQ:DADA), Blackstone Mortgage Trust Inc (NYSE:BXMT), Seaboard Corporation (NYSE:SEB), Premier Inc (NASDAQ:PINC), and SL Green Realty Corp (NYSE:SLG). All of these stocks’ market caps are closest to CC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NFG | 19 | 152900 | 7 |
| ADPT | 25 | 1775850 | -2 |
| DADA | 13 | 106594 | -5 |
| BXMT | 15 | 182001 | 3 |
| SEB | 13 | 103287 | 0 |
| PINC | 19 | 191763 | 2 |
| SLG | 17 | 170228 | -4 |
| Average | 17.3 | 383232 | 0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.3 hedge funds with bullish positions and the average amount invested in these stocks was $383 million. That figure was $549 million in CC’s case. Adaptive Biotechnologies Corporation (NASDAQ:ADPT) is the most popular stock in this table. On the other hand Dada Nexus Limited (NASDAQ:DADA) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks The Chemours Company (NYSE:CC) is more popular among hedge funds. Our overall hedge fund sentiment score for CC is 85.9. 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. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks returned 29.6% in 2021 and managed to beat the market by another 3.6 percentage points. Hedge funds were also right about betting on CC as the stock returned 13.4% since the end of September (through 1/31) 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.
Follow Chemours Co (NYSE:CC)
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Disclosure: None. This article was originally published at Insider Monkey.
