Hedge Funds Are Flocking Into Coupang, Inc. (CPNG)

In this article we will analyze whether Coupang, Inc. (NYSE:CPNG) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.

Is Coupang, Inc. (NYSE:CPNG) undervalued? Prominent investors were becoming more confident. The number of bullish hedge fund bets improved by 12 recently. Coupang, Inc. (NYSE:CPNG) was in 45 hedge funds’ portfolios at the end of September. The all time high for this statistic was previously 40. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that CPNG isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 33 hedge funds in our database with CPNG positions at the end of the second quarter.

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 fresh hedge fund action surrounding Coupang, Inc. (NYSE:CPNG).

Do Hedge Funds Think CPNG Is A Good Stock To Buy Now?

Heading into the fourth quarter of 2021, a total of 45 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 36% from the previous quarter. By comparison, 0 hedge funds held shares or bullish call options in CPNG a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, Greenoaks Capital, managed by Neil Mehta, holds the largest position in Coupang, Inc. (NYSE:CPNG). Greenoaks Capital has a $5.8313 billion position in the stock, comprising 78.3% of its 13F portfolio. On Greenoaks Capital’s heels is Lee Ainslie of Maverick Capital, with a $2.916 billion position; the fund has 29.4% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish include Stanley Druckenmiller’s Duquesne Capital, Christopher Lyle’s SCGE Management and Michael Pausic’s Foxhaven Asset Management. In terms of the portfolio weights assigned to each position Greenoaks Capital allocated the biggest weight to Coupang, Inc. (NYSE:CPNG), around 78.26% of its 13F portfolio. Maverick Capital is also relatively very bullish on the stock, earmarking 29.41 percent of its 13F equity portfolio to CPNG.

Now, some big names have been driving this bullishness. Duquesne Capital, managed by Stanley Druckenmiller, established the most outsized position in Coupang, Inc. (NYSE:CPNG). Duquesne Capital had $431.8 million invested in the company at the end of the quarter. David Abrams’s Abrams Capital Management also initiated a $122.9 million position during the quarter. The following funds were also among the new CPNG investors: Louis Bacon’s Moore Global Investments, Lei Zhang’s Hillhouse Capital Management, and Shashin Shah’s Think Investments.

Let’s now review hedge fund activity in other stocks similar to Coupang, Inc. (NYSE:CPNG). We will take a look at Wipro Limited (NYSE:WIT), Marriott International Inc (NYSE:MAR), Twitter Inc (NYSE:TWTR), Sumitomo Mitsui Financial Grp, Inc. (NYSE:SMFG), Coinbase Global Inc. (NASDAQ:COIN), Eni SpA (NYSE:E), and Freeport-McMoRan Inc. (NYSE:FCX). This group of stocks’ market values match CPNG’s market value.

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As you can see these stocks had an average of 39.7 hedge funds with bullish positions and the average amount invested in these stocks was $2239 million. That figure was $10770 million in CPNG’s case. Twitter Inc (NYSE:TWTR) is the most popular stock in this table. On the other hand Eni SpA (NYSE:E) is the least popular one with only 3 bullish hedge fund positions. Coupang, Inc. (NYSE:CPNG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CPNG is 63.1. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately CPNG wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CPNG were disappointed as the stock returned -4.8% since the end of September (through 11/30) 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 many of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.

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