The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 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 June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought Collier Creek Holdings (NYSE:CCH) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.
Collier Creek Holdings (NYSE:CCH) investors should pay attention to an increase in activity from the world’s largest hedge funds lately. Collier Creek Holdings (NYSE:CCH) was in 19 hedge funds’ portfolios at the end of June. The all time high for this statistics is 19. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that CCH isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are dozens of formulas stock market investors employ to value publicly traded companies. Some of the most underrated formulas are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the top picks of the top money managers can outperform the market by a healthy margin (see the details here).
Israel Englander of Millennium Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we are checking out this junior gold mining stock and we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website to get excerpts of these letters in your inbox. With all of this in mind let’s take a gander at the recent hedge fund action surrounding Collier Creek Holdings (NYSE:CCH).
Hedge fund activity in Collier Creek Holdings (NYSE:CCH)
At Q2’s end, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 36% from one quarter earlier. By comparison, 19 hedge funds held shares or bullish call options in CCH a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Collier Creek Holdings (NYSE:CCH) was held by Southpoint Capital Advisors, which reported holding $37.7 million worth of stock at the end of September. It was followed by Millennium Management with a $22.1 million position. Other investors bullish on the company included HBK Investments, Governors Lane, and Alyeska Investment Group. In terms of the portfolio weights assigned to each position Governors Lane allocated the biggest weight to Collier Creek Holdings (NYSE:CCH), around 1.31% of its 13F portfolio. Southpoint Capital Advisors is also relatively very bullish on the stock, designating 0.92 percent of its 13F equity portfolio to CCH.
Now, key hedge funds were leading the bulls’ herd. Southpoint Capital Advisors, managed by John Smith Clark, assembled the most valuable position in Collier Creek Holdings (NYSE:CCH). Southpoint Capital Advisors had $37.7 million invested in the company at the end of the quarter. David Alexander Witkin’s Beryl Capital Management also initiated a $3.6 million position during the quarter. The other funds with brand new CCH positions are Brandon Haley’s Holocene Advisors, Ira Unschuld’s Brant Point Investment Management, and John M. Angelo and Michael L. Gordon’s Angelo Gordon & Co.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Collier Creek Holdings (NYSE:CCH) but similarly valued. We will take a look at Noble Midstream Partners LP (NASDAQ:NBLX), Cornerstone Building Brands, Inc. (NYSE:CNR), Assembly Biosciences Inc (NASDAQ:ASMB), NetGear, Inc. (NASDAQ:NTGR), Azure Power Global Limited (NYSE:AZRE), SpartanNash Company (NASDAQ:SPTN), and Great Western Bancorp Inc (NYSE:GWB). This group of stocks’ market valuations are closest to CCH’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NBLX | 1 | 2332 | -1 |
| CNR | 19 | 65145 | -1 |
| ASMB | 19 | 293010 | 1 |
| NTGR | 19 | 38794 | 6 |
| AZRE | 3 | 10863 | -1 |
| SPTN | 15 | 62843 | 1 |
| GWB | 18 | 27559 | 8 |
| Average | 13.4 | 71507 | 1.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.4 hedge funds with bullish positions and the average amount invested in these stocks was $72 million. That figure was $141 million in CCH’s case. Cornerstone Building Brands, Inc. (NYSE:CNR) is the most popular stock in this table. On the other hand Noble Midstream Partners LP (NASDAQ:NBLX) is the least popular one with only 1 bullish hedge fund positions. Collier Creek Holdings (NYSE:CCH) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CCH is 90. 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 24.8% in 2020 through the end of third quarter and still beat the market by 19.3 percentage points. Hedge funds were also right about betting on CCH as the stock returned 31% during Q3 and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
