Hedge funds and other investment firms that we track manage billions of dollars of their wealthy clients’ money, and needless to say, they are painstakingly thorough when analyzing where to invest this money, as their own wealth depends on it. Regardless of the various methods used by elite investors like David Tepper and Dan Loeb, the resources they expend are second-to-none. This is especially valuable when it comes to small-cap stocks, which is where they generate their strongest outperformance, as their resources give them a huge edge when it comes to studying these stocks compared to the average investor, which is why we intently follow their activity in the small-cap space.
Sealed Air Corporation (NYSE:SEE) was in 30 hedge funds’ portfolios at the end of September. SEE investors should pay attention to an increase in activity from the world’s largest hedge funds in recent months. There were 25 hedge funds in our database with SEE holdings at the end of the previous quarter. Our calculations also showed that SEE isn’t among the 30 most popular stocks among hedge funds.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to check out the recent hedge fund action regarding Sealed Air Corporation (NYSE:SEE).
What have hedge funds been doing with Sealed Air Corporation (NYSE:SEE)?
Heading into the fourth quarter of 2018, a total of 30 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from the previous quarter. On the other hand, there were a total of 28 hedge funds with a bullish position in SEE at the beginning of this year. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Kensico Capital held the most valuable stake in Sealed Air Corporation (NYSE:SEE), which was worth $168.2 million at the end of the third quarter. On the second spot was Impax Asset Management which amassed $126 million worth of shares. Moreover, Samlyn Capital, D E Shaw, and Marshall Wace LLP were also bullish on Sealed Air Corporation (NYSE:SEE), allocating a large percentage of their portfolios to this stock.
As one would reasonably expect, some big names have jumped into Sealed Air Corporation (NYSE:SEE) headfirst. Nitorum Capital, managed by Seth Rosen, created the biggest position in Sealed Air Corporation (NYSE:SEE). Nitorum Capital had $44.8 million invested in the company at the end of the quarter. Malcolm Fairbairn’s Ascend Capital also initiated a $12.1 million position during the quarter. The following funds were also among the new SEE investors: David Brown’s Hawk Ridge Management, Matthew Tewksbury’s Stevens Capital Management, and Joel Greenblatt’s Gotham Asset Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Sealed Air Corporation (NYSE:SEE) but similarly valued. These stocks are BOK Financial Corporation (NASDAQ:BOKF), EQM Midstream Partners, LP (NYSE:EQM), Signature Bank (NASDAQ:SBNY), and The Toro Company (NYSE:TTC). All of these stocks’ market caps are similar to SEE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BOKF | 16 | 306438 | 2 |
| EQM | 8 | 69301 | 0 |
| SBNY | 25 | 538826 | 7 |
| TTC | 21 | 498911 | -2 |
| Average | 17.5 | 353369 | 1.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.5 hedge funds with bullish positions and the average amount invested in these stocks was $353 million. That figure was $715 million in SEE’s case. Signature Bank (NASDAQ:SBNY) is the most popular stock in this table. On the other hand EQM Midstream Partners, LP (NYSE:EQM) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Sealed Air Corporation (NYSE:SEE) is more popular among hedge funds. 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.
Disclosure: None. This article was originally published at Insider Monkey.
