Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is CF Industries Holdings, Inc. (NYSE:CF), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
CF Industries Holdings, Inc. (NYSE:CF) investors should pay attention to an increase in hedge fund sentiment of late. CF Industries Holdings, Inc. (NYSE:CF) was in 49 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 50. Our calculations also showed that CF isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
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. Keeping this in mind let’s take a peek at the new hedge fund action surrounding CF Industries Holdings, Inc. (NYSE:CF).
Dan Loeb of Third Point
Do Hedge Funds Think CF Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 49 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in CF over the last 25 quarters. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
The largest stake in CF Industries Holdings, Inc. (NYSE:CF) was held by Glendon Capital Management, which reported holding $276.8 million worth of stock at the end of September. It was followed by D E Shaw with a $135.6 million position. Other investors bullish on the company included Millennium Management, Castle Hook Partners, and Eminence Capital. In terms of the portfolio weights assigned to each position Glendon Capital Management allocated the biggest weight to CF Industries Holdings, Inc. (NYSE:CF), around 16.46% of its 13F portfolio. Brightline Capital is also relatively very bullish on the stock, setting aside 10.38 percent of its 13F equity portfolio to CF.
As industrywide interest jumped, key hedge funds were leading the bulls’ herd. Eminence Capital, managed by Ricky Sandler, established the largest position in CF Industries Holdings, Inc. (NYSE:CF). Eminence Capital had $70.1 million invested in the company at the end of the quarter. Dan Loeb’s Third Point also made a $55.8 million investment in the stock during the quarter. The other funds with new positions in the stock are David Rosen’s Rubric Capital Management, Dmitry Balyasny’s Balyasny Asset Management, and Suzi Nutton (CEO)’s Lansdowne Partners.
Let’s also examine hedge fund activity in other stocks similar to CF Industries Holdings, Inc. (NYSE:CF). We will take a look at F5, Inc. (NASDAQ:FFIV), Medical Properties Trust, Inc. (NYSE:MPW), Sasol Limited (NYSE:SSL), Steel Dynamics, Inc. (NASDAQ:STLD), Marqeta Inc. (NASDAQ:MQ), Formula One Group (NASDAQ:FWONK), and PulteGroup, Inc. (NYSE:PHM). This group of stocks’ market valuations match CF’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FFIV | 27 | 686095 | -3 |
| MPW | 18 | 365527 | -1 |
| SSL | 4 | 76164 | -1 |
| STLD | 23 | 481466 | -3 |
| MQ | 20 | 1100795 | 20 |
| FWONK | 40 | 1901404 | -1 |
| PHM | 35 | 771756 | 1 |
| Average | 23.9 | 769030 | 1.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.9 hedge funds with bullish positions and the average amount invested in these stocks was $769 million. That figure was $1273 million in CF’s case. Formula One Group (NASDAQ:FWONK) is the most popular stock in this table. On the other hand Sasol Limited (NYSE:SSL) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks CF Industries Holdings, Inc. (NYSE:CF) is more popular among hedge funds. Our overall hedge fund sentiment score for CF is 86.4. 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 returned 28.6% in 2021 through November 30th but still managed to beat the market by 5.6 percentage points. Hedge funds were also right about betting on CF as the stock returned 9.1% since the end of September (through 11/30) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Follow Cf Industries Holdings Inc. (NYSE:CF)
Follow Cf Industries Holdings Inc. (NYSE:CF)
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Disclosure: None. This article was originally published at Insider Monkey.
