Do Hedge Funds Love Carlisle Companies, Inc. (CSL)?

Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts usually don’t make them change their opinion towards a company. This time it may be different. The coronavirus pandemic destroyed the high correlations among major industries and asset classes. We are now in a stock pickers market where fundamentals of a stock have more effect on the price than the overall direction of the market. As a result we observe sudden and large changes in hedge fund positions depending on the news flow. Let’s take a look at the hedge fund sentiment towards Carlisle Companies, Inc. (NYSE:CSL) to find out whether there were any major changes in hedge funds’ views.

Is Carlisle Companies, Inc. (NYSE:CSL) a buy here? Hedge funds were buying. The number of bullish hedge fund bets went up by 1 in recent months. Carlisle Companies, Inc. (NYSE:CSL) was in 18 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 38. Our calculations also showed that CSL isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 17 hedge funds in our database with CSL holdings at the end of December.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Richard Driehaus of Driehaus Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now we’re going to go over the new hedge fund action regarding Carlisle Companies, Inc. (NYSE:CSL).

Do Hedge Funds Think CSL Is A Good Stock To Buy Now?

At the end of the first quarter, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 6% from one quarter earlier. By comparison, 23 hedge funds held shares or bullish call options in CSL a year ago. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

The largest stake in Carlisle Companies, Inc. (NYSE:CSL) was held by Royce & Associates, which reported holding $43.9 million worth of stock at the end of December. It was followed by AQR Capital Management with a $30 million position. Other investors bullish on the company included Lodge Hill Capital, Renaissance Technologies, and D E Shaw. In terms of the portfolio weights assigned to each position Lodge Hill Capital allocated the biggest weight to Carlisle Companies, Inc. (NYSE:CSL), around 11.33% of its 13F portfolio. Harvey Partners is also relatively very bullish on the stock, setting aside 2.16 percent of its 13F equity portfolio to CSL.

Now, key money managers were breaking ground themselves. Renaissance Technologies, initiated the most valuable position in Carlisle Companies, Inc. (NYSE:CSL). Renaissance Technologies had $20.6 million invested in the company at the end of the quarter. Ian Simm’s Impax Asset Management also initiated a $0.5 million position during the quarter. The only other fund with a brand new CSL position is Lee Ainslie’s Maverick Capital.

Let’s also examine hedge fund activity in other stocks similar to Carlisle Companies, Inc. (NYSE:CSL). We will take a look at Service Corporation International (NYSE:SCI), GSX Techedu Inc. (NYSE:GSX), Alaska Air Group, Inc. (NYSE:ALK), Assurant, Inc. (NYSE:AIZ), Reinsurance Group of America Inc (NYSE:RGA), UGI Corp (NYSE:UGI), and Vistra Corp. (NYSE:VST). This group of stocks’ market caps resemble CSL’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 29.1 hedge funds with bullish positions and the average amount invested in these stocks was $629 million. That figure was $186 million in CSL’s case. Vistra Corp. (NYSE:VST) is the most popular stock in this table. On the other hand UGI Corp (NYSE:UGI) is the least popular one with only 19 bullish hedge fund positions. Compared to these stocks Carlisle Companies, Inc. (NYSE:CSL) is even less popular than UGI. Our overall hedge fund sentiment score for CSL is 20.2. 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 gained 28.5% in 2021 through July 23rd but managed to beat the market by 10.1 percentage points. A small number of hedge funds were also right about betting on CSL, though not to the same extent, as the stock returned 21.7% since the end of March (through July 23rd) and outperformed the market as well.

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Disclosure: None. This article was originally published at Insider Monkey.

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