Most investors tend to think that hedge funds and other asset managers are worthless, as they cannot beat even simple index fund portfolios. In fact, most people expect hedge funds to compete with and outperform the bull market that we have witnessed in recent years. However, hedge funds are generally partially hedged and aim at delivering attractive risk-adjusted returns rather than following the ups and downs of equity markets hoping that they will outperform the broader market. Our research shows that certain hedge funds do have great stock picking skills (and we can identify these hedge funds in advance pretty accurately), so let’s take a glance at the smart money sentiment towards SciPlay Corporation (NASDAQ:SCPL).
SciPlay Corporation (NASDAQ:SCPL) has seen an increase in enthusiasm from smart money lately. SciPlay Corporation (NASDAQ:SCPL) was in 23 hedge funds’ portfolios at the end of September. The all time high for this statistic is 27. Our calculations also showed that SCPL isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Clint Carlson of Carlson Capital
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. With all of this in mind let’s view the new hedge fund action surrounding SciPlay Corporation (NASDAQ:SCPL).
Do Hedge Funds Think SCPL Is A Good Stock To Buy Now?
At Q3’s end, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 35% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in SCPL over the last 25 quarters. 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 publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, TIG Advisors, managed by Carl Tiedemann and Michael Tiedemann, holds the biggest position in SciPlay Corporation (NASDAQ:SCPL). TIG Advisors has a $36.8 million position in the stock, comprising 1.7% of its 13F portfolio. Coming in second is Hein Park Capital, managed by Courtney Carson, which holds a $24.5 million position; 3.6% of its 13F portfolio is allocated to the stock. Other members of the smart money that hold long positions comprise Dmitry Balyasny’s Balyasny Asset Management, Clint Carlson’s Carlson Capital and Noam Gottesman’s GLG Partners. In terms of the portfolio weights assigned to each position Hein Park Capital allocated the biggest weight to SciPlay Corporation (NASDAQ:SCPL), around 3.55% of its 13F portfolio. BCK Capital is also relatively very bullish on the stock, earmarking 3.3 percent of its 13F equity portfolio to SCPL.
As industrywide interest jumped, key money managers have jumped into SciPlay Corporation (NASDAQ:SCPL) headfirst. TIG Advisors, managed by Carl Tiedemann and Michael Tiedemann, created the biggest position in SciPlay Corporation (NASDAQ:SCPL). TIG Advisors had $36.8 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also made a $21.9 million investment in the stock during the quarter. The other funds with brand new SCPL positions are Clint Carlson’s Carlson Capital, John Bader’s Halcyon Asset Management, and Himanshu Gulati’s Antara Capital.
Let’s go over hedge fund activity in other stocks similar to SciPlay Corporation (NASDAQ:SCPL). We will take a look at Zepp Health Corporation (NYSE:ZEPP), Rekor Systems, Inc. (NASDAQ:REKR), Bit Digital, Inc. (NASDAQ:BTBT), Akebia Therapeutics Inc (NASDAQ:AKBA), Fluidigm Corporation (NASDAQ:FLDM), Compugen Ltd. (NASDAQ:CGEN), and Dorian LPG Ltd (NYSE:LPG). All of these stocks’ market caps are closest to SCPL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ZEPP | 2 | 805 | 0 |
| REKR | 8 | 31630 | -5 |
| BTBT | 4 | 69218 | -3 |
| AKBA | 12 | 49104 | -2 |
| FLDM | 17 | 118668 | 2 |
| CGEN | 13 | 79624 | 2 |
| LPG | 14 | 79644 | -5 |
| Average | 10 | 61242 | -1.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $61 million. That figure was $206 million in SCPL’s case. Fluidigm Corporation (NASDAQ:FLDM) is the most popular stock in this table. On the other hand Zepp Health Corporation (NYSE:ZEPP) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks SciPlay Corporation (NASDAQ:SCPL) is more popular among hedge funds. Our overall hedge fund sentiment score for SCPL is 85.6. 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 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. Unfortunately SCPL wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on SCPL were disappointed as the stock returned -23.4% since the end of the third quarter (through 12/9) 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 most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
