As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the second quarter. We get to see hedge funds’ thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Coca-Cola Consolidated, Inc. (NASDAQ:COKE).
Is Coca-Cola Consolidated, Inc. (NASDAQ:COKE) an excellent investment right now? The smart money is taking an optimistic view. The number of long hedge fund bets moved up by 2 lately. Our calculations also showed that COKE isn’t among the 30 most popular stocks among hedge funds (view the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
According to most traders, hedge funds are seen as slow, old financial tools of the past. While there are greater than 8000 funds in operation at present, Our experts look at the crème de la crème of this group, around 750 funds. These hedge fund managers manage the majority of all hedge funds’ total asset base, and by shadowing their unrivaled equity investments, Insider Monkey has revealed numerous investment strategies that have historically outrun Mr. Market. Insider Monkey’s flagship hedge fund strategy outperformed the S&P 500 index by around 5 percentage points per year since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to check out the fresh hedge fund action surrounding Coca-Cola Consolidated, Inc. (NASDAQ:COKE).
Hedge fund activity in Coca-Cola Consolidated, Inc. (NASDAQ:COKE)
At the end of the second quarter, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of 22% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in COKE over the last 16 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Citadel Investment Group held the most valuable stake in Coca-Cola Consolidated, Inc. (NASDAQ:COKE), which was worth $7.7 million at the end of the second quarter. On the second spot was GLG Partners which amassed $5.9 million worth of shares. Moreover, Renaissance Technologies, AQR Capital Management, and Two Sigma Advisors were also bullish on Coca-Cola Consolidated, Inc. (NASDAQ:COKE), allocating a large percentage of their portfolios to this stock.
With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. Citadel Investment Group, managed by Ken Griffin, assembled the largest position in Coca-Cola Consolidated, Inc. (NASDAQ:COKE). Citadel Investment Group had $7.7 million invested in the company at the end of the quarter. Noam Gottesman’s GLG Partners also initiated a $5.9 million position during the quarter. The other funds with brand new COKE positions are Joel Greenblatt’s Gotham Asset Management, Dmitry Balyasny’s Balyasny Asset Management, and Bruce Kovner’s Caxton Associates LP.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Coca-Cola Consolidated, Inc. (NASDAQ:COKE) but similarly valued. We will take a look at CVB Financial Corp. (NASDAQ:CVBF), NuStar Energy L.P. (NYSE:NS), Gol Linhas Aereas Inteligentes SA (NYSE:GOL), and Kennedy-Wilson Holdings Inc (NYSE:KW). This group of stocks’ market valuations match COKE’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CVBF | 12 | 60853 | 0 |
| NS | 2 | 11421 | 1 |
| GOL | 8 | 199619 | -8 |
| KW | 13 | 468473 | -1 |
| Average | 8.75 | 185092 | -2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.75 hedge funds with bullish positions and the average amount invested in these stocks was $185 million. That figure was $26 million in COKE’s case. Kennedy-Wilson Holdings Inc (NYSE:KW) is the most popular stock in this table. On the other hand NuStar Energy L.P. (NYSE:NS) is the least popular one with only 2 bullish hedge fund positions. Coca-Cola Consolidated, Inc. (NASDAQ:COKE) is not the most popular stock in this group but hedge fund interest is still above average. 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 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately COKE wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on COKE were disappointed as the stock returned 1.6% during the third 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 many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.
