In this article you are going to find out whether hedge funds think Celanese Corporation (NYSE:CE) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Celanese Corporation (NYSE:CE) investors should be aware of an increase in hedge fund interest of late. Celanese Corporation (NYSE:CE) was in 36 hedge funds’ portfolios at the end of March. The all time high for this statistic was previously 33. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that CE isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Thomas Claugus of GMT Capital
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. Keeping this in mind we’re going to take a look at the fresh hedge fund action surrounding Celanese Corporation (NYSE:CE).
Do Hedge Funds Think CE Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 36 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 9% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in CE over the last 23 quarters. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
More specifically, GMT Capital was the largest shareholder of Celanese Corporation (NYSE:CE), with a stake worth $219.5 million reported as of the end of March. Trailing GMT Capital was Holocene Advisors, which amassed a stake valued at $133.7 million. Citadel Investment Group, Millennium Management, and AQR Capital 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 GMT Capital allocated the biggest weight to Celanese Corporation (NYSE:CE), around 16.12% of its 13F portfolio. Tiger Eye Capital is also relatively very bullish on the stock, dishing out 2.15 percent of its 13F equity portfolio to CE.
As one would reasonably expect, key money managers have been driving this bullishness. Bridgewater Associates, managed by Ray Dalio, assembled the biggest position in Celanese Corporation (NYSE:CE). Bridgewater Associates had $14.9 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $12.2 million position during the quarter. The other funds with new positions in the stock are Ben Gambill’s Tiger Eye Capital, Renaissance Technologies, and D. E. Shaw’s D E Shaw.
Let’s now take a look at hedge fund activity in other stocks similar to Celanese Corporation (NYSE:CE). These stocks are Healthpeak Properties, Inc. (NYSE:PEAK), Albemarle Corporation (NYSE:ALB), Rollins, Inc. (NYSE:ROL), Raymond James Financial, Inc. (NYSE:RJF), Ally Financial Inc (NYSE:ALLY), Viatris Inc. (NASDAQ:VTRS), and Tradeweb Markets Inc. (NASDAQ:TW). This group of stocks’ market values are similar to CE’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PEAK | 18 | 264899 | -4 |
| ALB | 31 | 262992 | 10 |
| ROL | 30 | 643375 | 2 |
| RJF | 33 | 749300 | -1 |
| ALLY | 51 | 2804131 | -6 |
| VTRS | 58 | 1825444 | -9 |
| TW | 26 | 311809 | -5 |
| Average | 35.3 | 980279 | -1.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 35.3 hedge funds with bullish positions and the average amount invested in these stocks was $980 million. That figure was $759 million in CE’s case. Viatris Inc. (NASDAQ:VTRS) is the most popular stock in this table. On the other hand Healthpeak Properties, Inc. (NYSE:PEAK) is the least popular one with only 18 bullish hedge fund positions. Celanese Corporation (NYSE:CE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CE is 60.5. 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 19.3% in 2021 through June 25th and beat the market again by 4.8 percentage points. Unfortunately CE wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CE were disappointed as the stock returned 0.7% since the end of March (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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
