Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 750 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Coca-Cola Bottling Co. Consolidated (NASDAQ:COKE) in this article.
Coca-Cola Bottling Co. Consolidated (NASDAQ:COKE) has experienced an increase in hedge fund interest in recent months. COKE was in 14 hedge funds’ portfolios at the end of September. There were 11 hedge funds in our database with COKE positions at the end of the previous quarter. Our calculations also showed that COKE isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.8% through November 21, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Noam Gottesman of GLG Partners
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. Let’s view the fresh hedge fund action regarding Coca-Cola Bottling Co. Consolidated (NASDAQ:COKE).
Hedge fund activity in Coca-Cola Bottling Co. Consolidated (NASDAQ:COKE)
Heading into the fourth quarter of 2019, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of 27% from the second quarter of 2019. On the other hand, there were a total of 9 hedge funds with a bullish position in COKE a year ago. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
The largest stake in Coca-Cola Bottling Co. Consolidated (NASDAQ:COKE) was held by GLG Partners, which reported holding $5.2 million worth of stock at the end of September. It was followed by Two Sigma Advisors with a $3.7 million position. Other investors bullish on the company included Citadel Investment Group, PDT Partners, and AQR Capital Management. In terms of the portfolio weights assigned to each position Quantinno Capital allocated the biggest weight to Coca-Cola Bottling Co. Consolidated (NASDAQ:COKE), around 0.16% of its 13F portfolio. PDT Partners is also relatively very bullish on the stock, setting aside 0.12 percent of its 13F equity portfolio to COKE.
As aggregate interest increased, some big names have been driving this bullishness. Tudor Investment Corp, managed by Paul Tudor Jones, assembled the largest position in Coca-Cola Bottling Co. Consolidated (NASDAQ:COKE). Tudor Investment Corp had $0.8 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $0.7 million investment in the stock during the quarter. The following funds were also among the new COKE investors: Benjamin A. Smith’s Laurion Capital Management and David Harding’s Winton Capital Management.
Let’s go over hedge fund activity in other stocks similar to Coca-Cola Bottling Co. Consolidated (NASDAQ:COKE). We will take a look at QTS Realty Trust Inc (NYSE:QTS), Moog Inc (NYSE:MOG), AllianceBernstein Holding LP (NYSE:AB), and Brady Corp (NYSE:BRC). This group of stocks’ market valuations are closest to COKE’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| QTS | 24 | 382800 | 1 |
| MOG | 20 | 102823 | 2 |
| AB | 8 | 18589 | -2 |
| BRC | 18 | 200005 | 5 |
| Average | 17.5 | 176054 | 1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.5 hedge funds with bullish positions and the average amount invested in these stocks was $176 million. That figure was $20 million in COKE’s case. QTS Realty Trust Inc (NYSE:QTS) is the most popular stock in this table. On the other hand AllianceBernstein Holding LP (NYSE:AB) is the least popular one with only 8 bullish hedge fund positions. Coca-Cola Bottling Co. Consolidated (NASDAQ:COKE) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately COKE wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); COKE investors were disappointed as the stock returned -11% during the first two months of the fourth quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
