The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 867 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 September 30th, when the S&P 500 Index was trading around the 4300 level. Since then investors decided to bet on the economic recovery and a stock market rebound even though we experienced a temporary correction in January. In this article you are going to find out whether hedge funds thought Carnival Corporation (NYSE:CCL) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.
Is Carnival Corporation (NYSE:CCL) an excellent investment today? Money managers were in an optimistic mood. The number of bullish hedge fund bets improved by 5 in recent months. Carnival Corporation (NYSE:CCL) was in 36 hedge funds’ portfolios at the end of September. The all time high for this statistic is 53. Our calculations also showed that CCL isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
David E. Shaw of D.E. Shaw
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. Keeping this in mind let’s analyze the key hedge fund action regarding Carnival Corporation (NYSE:CCL).
Do Hedge Funds Think CCL Is A Good Stock To Buy Now?
At Q3’s end, a total of 36 of the hedge funds tracked by Insider Monkey were long this stock, a change of 16% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CCL over the last 25 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Citadel Investment Group, managed by Ken Griffin, holds the biggest position in Carnival Corporation (NYSE:CCL). Citadel Investment Group has a $196.5 million call position in the stock, comprising less than 0.1%% of its 13F portfolio. On Citadel Investment Group’s heels is Chris Rokos of Rokos Capital Management, with a $140.1 million call position; 3% of its 13F portfolio is allocated to the stock. Other members of the smart money that are bullish include D. E. Shaw’s D E Shaw, and Panayotis Takis Sparaggis’s Alkeon Capital Management. In terms of the portfolio weights assigned to each position Covalent Capital Partners allocated the biggest weight to Carnival Corporation (NYSE:CCL), around 4.88% of its 13F portfolio. Prentice Capital Management is also relatively very bullish on the stock, earmarking 4.29 percent of its 13F equity portfolio to CCL.
With a general bullishness amongst the heavyweights, specific money managers were leading the bulls’ herd. Candlestick Capital Management, managed by Jack Woodruff, established the biggest call position in Carnival Corporation (NYSE:CCL). Candlestick Capital Management had $62.5 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also initiated a $22.9 million position during the quarter. The other funds with brand new CCL positions are Alexander Mitchell’s Scopus Asset Management, Jinghua Yan’s TwinBeech Capital, and Dmitry Balyasny’s Balyasny Asset Management.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Carnival Corporation (NYSE:CCL) but similarly valued. These stocks are Nucor Corporation (NYSE:NUE), Valero Energy Corporation (NYSE:VLO), Orange SA (NYSE:ORAN), Tyson Foods, Inc. (NYSE:TSN), AMETEK, Inc. (NYSE:AME), Genmab A/S (NASDAQ:GMAB), and Stanley Black & Decker, Inc. (NYSE:SWK). This group of stocks’ market caps resemble CCL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NUE | 25 | 199344 | -7 |
| VLO | 32 | 289108 | -6 |
| ORAN | 3 | 20523 | 0 |
| TSN | 33 | 865195 | 0 |
| AME | 38 | 1320239 | 0 |
| GMAB | 9 | 122715 | 0 |
| SWK | 37 | 776002 | -7 |
| Average | 25.3 | 513304 | -2.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.3 hedge funds with bullish positions and the average amount invested in these stocks was $513 million. That figure was $521 million in CCL’s case. AMETEK, Inc. (NYSE:AME) is the most popular stock in this table. On the other hand Orange SA (NYSE:ORAN) is the least popular one with only 3 bullish hedge fund positions. Carnival Corporation (NYSE:CCL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CCL is 77.5. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 gained 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately, CCL wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CCL were disappointed as the stock returned -20.8% since the end of September (through 1/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as all of these stocks already outperformed the market since 2019.
Follow Carnival Corp (NYSE:CCL)
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Disclosure: None. This article was originally published at Insider Monkey.
