Hedge Funds Are Piling Into Celsius Holdings, Inc. (CELH)

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 Celsius Holdings, Inc. (NASDAQ:CELH).

Is Celsius Holdings, Inc. (NASDAQ:CELH) a buy here? Money managers were betting on the stock. The number of long hedge fund bets increased by 2 lately. Celsius Holdings, Inc. (NASDAQ:CELH) was in 22 hedge funds’ portfolios at the end of September. The all time high for this statistic was previously 20. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that CELH isn’t among the 30 most popular stocks among hedge funds (click for Q2 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 analyze the new hedge fund action encompassing Celsius Holdings, Inc. (NASDAQ:CELH).

Donald Sussman of Paloma Partners

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

At third quarter’s end, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 10% from the second quarter of 2021. By comparison, 17 hedge funds held shares or bullish call options in CELH a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Driehaus Capital held the most valuable stake in Celsius Holdings, Inc. (NASDAQ:CELH), which was worth $121.2 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $21 million worth of shares. Marshall Wace LLP, GLG Partners, and Bridgewater Associates were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Driehaus Capital allocated the biggest weight to Celsius Holdings, Inc. (NASDAQ:CELH), around 1.44% of its 13F portfolio. 1623 Capital is also relatively very bullish on the stock, designating 1.06 percent of its 13F equity portfolio to CELH.

As one would reasonably expect, key hedge funds have jumped into Celsius Holdings, Inc. (NASDAQ:CELH) headfirst. Intrinsic Edge Capital, managed by Mark Coe, assembled the most outsized position in Celsius Holdings, Inc. (NASDAQ:CELH). Intrinsic Edge Capital had $10.4 million invested in the company at the end of the quarter. Donald Sussman’s Paloma Partners also initiated a $2.6 million position during the quarter. The other funds with new positions in the stock are Steve Cohen’s Point72 Asset Management, Peter Algert’s Algert Global, and Ran Pang’s Quantamental Technologies.

Let’s go over hedge fund activity in other stocks similar to Celsius Holdings, Inc. (NASDAQ:CELH). These stocks are Kornit Digital Ltd. (NASDAQ:KRNT), Sportradar Group AG (NASDAQ:SRAD), Fiverr International Ltd. (NYSE:FVRR), AngloGold Ashanti Limited (NYSE:AU), Exelixis, Inc. (NASDAQ:EXEL), Beyond Meat, Inc. (NASDAQ:BYND), and Prosperity Bancshares, Inc. (NYSE:PB). This group of stocks’ market values are closest to CELH’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 21.9 hedge funds with bullish positions and the average amount invested in these stocks was $344 million. That figure was $221 million in CELH’s case. Sportradar Group AG (NASDAQ:SRAD) is the most popular stock in this table. On the other hand AngloGold Ashanti Limited (NYSE:AU) is the least popular one with only 10 bullish hedge fund positions. Celsius Holdings, Inc. (NASDAQ:CELH) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CELH is 67. 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 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately CELH wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CELH were disappointed as the stock returned -17.2% since the end of September (through 12/31) 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.