Hedge Funds Aren’t Crazy About Cott Corporation (USA) (COT) Anymore

Cott Corporation (USA) (NYSE:COT) was in 10 hedge funds’ portfolio at the end of December. COT investors should pay attention to a decrease in hedge fund interest in recent months. There were 15 hedge funds in our database with COT holdings at the end of the previous quarter.

At the moment, there are dozens of indicators market participants can use to track Mr. Market. A couple of the best are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best investment managers can outperform the broader indices by a solid margin (see just how much).

Equally as beneficial, optimistic insider trading sentiment is another way to parse down the financial markets. Just as you’d expect, there are a variety of motivations for an upper level exec to get rid of shares of his or her company, but just one, very simple reason why they would initiate a purchase. Many empirical studies have demonstrated the impressive potential of this strategy if piggybackers understand what to do (learn more here).

Keeping this in mind, let’s take a look at the key action surrounding Cott Corporation (USA) (NYSE:COT).

How are hedge funds trading Cott Corporation (USA) (NYSE:COT)?

At year’s end, a total of 10 of the hedge funds we track were long in this stock, a change of -33% from the previous quarter. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were upping their stakes considerably.

Of the funds we track, David Gallo’s Valinor Management LLC had the largest position in Cott Corporation (USA) (NYSE:COT), worth close to $68.9 million, comprising 2.9% of its total 13F portfolio. The second largest stake is held by Roberto Mignone of Bridger Management, with a $53.1 million position; the fund has 3.8% of its 13F portfolio invested in the stock. Remaining peers that are bullish include D. E. Shaw’s D E Shaw, Michael Price’s MFP Investors and Jim Simons’s Renaissance Technologies.

Due to the fact that Cott Corporation (USA) (NYSE:COT) has faced falling interest from the smart money, logic holds that there was a specific group of hedge funds who were dropping their entire stakes heading into 2013. It’s worth mentioning that Mark Travis’s Intrepid Capital Management sold off the largest position of the “upper crust” of funds we monitor, valued at an estimated $8.3 million in stock., and Robert B. Gillam of McKinley Capital Management was right behind this move, as the fund said goodbye to about $2.3 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 5 funds heading into 2013.

What do corporate executives and insiders think about Cott Corporation (USA) (NYSE:COT)?

Insider trading activity, especially when it’s bullish, is most useful when the company in focus has seen transactions within the past 180 days. Over the last half-year time period, Cott Corporation (USA) (NYSE:COT) has seen zero unique insiders buying, and 7 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Cott Corporation (USA) (NYSE:COT). These stocks are Coca-Cola Bottling Co. Consolidated (NASDAQ:COKE), National Beverage Corp. (NASDAQ:FIZZ), and Sodastream International Ltd (NASDAQ:SODA). This group of stocks are in the beverages – soft drinks industry and their market caps match COT’s market cap.

With the results demonstrated by the aforementioned time-tested strategies, retail investors should always keep an eye on hedge fund and insider trading sentiment, and Cott Corporation (USA) (NYSE:COT) applies perfectly to this mantra.

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