While the market driven by short-term sentiment influenced by the accommodative interest rate environment in the US, virus news and stimulus spending, many smart money investors are starting to get cautious towards the current bull run since March, 2020 and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 40,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Coca-Cola Europacific Partners plc (NYSE:CCEP).
Is Coca-Cola Europacific Partners plc (NYSE:CCEP) a buy here? Prominent investors were becoming less confident. The number of long hedge fund bets retreated by 3 in recent months. Coca-Cola Europacific Partners plc (NYSE:CCEP) was in 25 hedge funds’ portfolios at the end of March. The all time high for this statistic is 40. Our calculations also showed that CCEP isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In today’s marketplace there are several formulas market participants put to use to evaluate their stock investments. A couple of the less known formulas are hedge fund and insider trading interest. We have shown that, historically, those who follow the best picks of the elite investment managers can outpace the broader indices by a superb margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Keith Meister of Corvex Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery 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. 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. With all of this in mind we’re going to take a glance at the fresh hedge fund action surrounding Coca-Cola Europacific Partners plc (NYSE:CCEP).
Do Hedge Funds Think CCEP Is A Good Stock To Buy Now?
At the end of March, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of -11% from one quarter earlier. By comparison, 22 hedge funds held shares or bullish call options in CCEP a year ago. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
Among these funds, Hengistbury Investment Partners held the most valuable stake in Coca-Cola Europacific Partners plc (NYSE:CCEP), which was worth $236.2 million at the end of the fourth quarter. On the second spot was Polaris Capital Management which amassed $200.5 million worth of shares. Candlestick Capital Management, Corvex Capital, and Senator Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Hengistbury Investment Partners allocated the biggest weight to Coca-Cola Europacific Partners plc (NYSE:CCEP), around 25.37% of its 13F portfolio. Kehrs Ridge Capital is also relatively very bullish on the stock, setting aside 8.49 percent of its 13F equity portfolio to CCEP.
Judging by the fact that Coca-Cola Europacific Partners plc (NYSE:CCEP) has faced falling interest from the entirety of the hedge funds we track, logic holds that there is a sect of fund managers that slashed their entire stakes in the first quarter. It’s worth mentioning that Scott Ferguson’s Sachem Head Capital dumped the largest position of the “upper crust” of funds monitored by Insider Monkey, totaling close to $74.7 million in stock, Renaissance Technologies was right behind this move, as the fund dumped about $28 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 3 funds in the first quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Coca-Cola Europacific Partners plc (NYSE:CCEP). These stocks are Realty Income Corporation (NYSE:O), Slack Technologies Inc (NYSE:WORK), Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK), CDW Corporation (NASDAQ:CDW), Zscaler, Inc. (NASDAQ:ZS), PG&E Corporation (NYSE:PCG), and Arista Networks Inc (NYSE:ANET). This group of stocks’ market values resemble CCEP’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| O | 18 | 183624 | -6 |
| WORK | 60 | 4262404 | -6 |
| TLK | 4 | 158462 | 0 |
| CDW | 30 | 1908866 | -13 |
| ZS | 34 | 809507 | -1 |
| PCG | 65 | 5665287 | -1 |
| ANET | 26 | 253852 | -9 |
| Average | 33.9 | 1891715 | -5.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 33.9 hedge funds with bullish positions and the average amount invested in these stocks was $1892 million. That figure was $1110 million in CCEP’s case. PG&E Corporation (NYSE:PCG) is the most popular stock in this table. On the other hand Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK) is the least popular one with only 4 bullish hedge fund positions. Coca-Cola Europacific Partners plc (NYSE:CCEP) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CCEP is 38. 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 24% in 2021 through July 9th and beat the market by 6.7 percentage points. A small number of hedge funds were also right about betting on CCEP, though not to the same extent, as the stock returned 17.7% since the end of Q1 (through July 9th) and outperformed the market.
Follow Coca-Cola European Partners Plc (NYSE:CCEP)
Follow Coca-Cola European Partners Plc (NYSE:CCEP)
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Disclosure: None. This article was originally published at Insider Monkey.
