The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31st. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards SeaWorld Entertainment Inc (NYSE:SEAS).
Is SeaWorld Entertainment Inc (NYSE:SEAS) going to take off soon? Investors who are in the know were getting more optimistic. The number of long hedge fund bets improved by 6 recently. SeaWorld Entertainment Inc (NYSE:SEAS) was in 39 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 39. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that SEAS isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 33 hedge funds in our database with SEAS positions at the end of the fourth quarter.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Steven Cohen of Point72 Asset Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best battery 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. 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 homepage. Now we’re going to review the key hedge fund action surrounding SeaWorld Entertainment Inc (NYSE:SEAS).
Do Hedge Funds Think SEAS Is A Good Stock To Buy Now?
At the end of March, a total of 39 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 18% from the fourth quarter of 2020. By comparison, 27 hedge funds held shares or bullish call options in SEAS a year ago. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
More specifically, Hill Path Capital was the largest shareholder of SeaWorld Entertainment Inc (NYSE:SEAS), with a stake worth $1351.3 million reported as of the end of March. Trailing Hill Path Capital was Melvin Capital Management, which amassed a stake valued at $89.4 million. Candlestick Capital Management, Point72 Asset Management, and Scopus Asset Management 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 Hill Path Capital allocated the biggest weight to SeaWorld Entertainment Inc (NYSE:SEAS), around 80.77% of its 13F portfolio. Fairpointe Capital is also relatively very bullish on the stock, designating 7.87 percent of its 13F equity portfolio to SEAS.
As one would reasonably expect, some big names were leading the bulls’ herd. Melvin Capital Management, managed by Gabriel Plotkin, established the most outsized position in SeaWorld Entertainment Inc (NYSE:SEAS). Melvin Capital Management had $89.4 million invested in the company at the end of the quarter. Alexander Mitchell’s Scopus Asset Management also initiated a $47.2 million position during the quarter. The other funds with brand new SEAS positions are Richard Driehaus’s Driehaus Capital, Ira Unschuld’s Brant Point Investment Management, and Matthew Hulsizer’s PEAK6 Capital Management.
Let’s check out hedge fund activity in other stocks similar to SeaWorld Entertainment Inc (NYSE:SEAS). We will take a look at Millicom International Cellular S.A. (NASDAQ:TIGO), Progyny, Inc. (NASDAQ:PGNY), New Relic Inc (NYSE:NEWR), EnerSys (NYSE:ENS), Umpqua Holdings Corp (NASDAQ:UMPQ), Brighthouse Financial, Inc. (NASDAQ:BHF), and Glaukos Corporation (NYSE:GKOS). All of these stocks’ market caps resemble SEAS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TIGO | 5 | 42136 | -1 |
| PGNY | 26 | 221476 | 2 |
| NEWR | 27 | 1141779 | -3 |
| ENS | 28 | 119582 | 4 |
| UMPQ | 25 | 245140 | 2 |
| BHF | 28 | 539727 | -5 |
| GKOS | 18 | 47095 | 5 |
| Average | 22.4 | 336705 | 0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.4 hedge funds with bullish positions and the average amount invested in these stocks was $337 million. That figure was $1882 million in SEAS’s case. EnerSys (NYSE:ENS) is the most popular stock in this table. On the other hand Millicom International Cellular S.A. (NASDAQ:TIGO) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks SeaWorld Entertainment Inc (NYSE:SEAS) is more popular among hedge funds. Our overall hedge fund sentiment score for SEAS 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 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 19.3% in 2021 through June 25th and still beat the market by 4.8 percentage points. Unfortunately SEAS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on SEAS were disappointed as the stock returned 5.5% since the end of the first quarter (through 6/25) 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 most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
