Insider Monkey finished processing more than 700 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of December 31st, 2018. What do these smart investors think about The Chemours Company (NYSE:CC)?
The Chemours Company (NYSE:CC) investors should pay attention to a decrease in enthusiasm from smart money in recent months. CC was in 28 hedge funds’ portfolios at the end of December. There were 31 hedge funds in our database with CC holdings at the end of the previous quarter. Our calculations also showed that CC isn’t among the 30 most popular stocks among hedge funds.
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 market by 32 percentage points since May 2014 through March 12, 2019 (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 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s take a look at the latest hedge fund action surrounding The Chemours Company (NYSE:CC).
How have hedgies been trading The Chemours Company (NYSE:CC)?
At Q4’s end, a total of 28 of the hedge funds tracked by Insider Monkey were long this stock, a change of -10% from the second quarter of 2018. Below, you can check out the change in hedge fund sentiment towards CC over the last 14 quarters. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
More specifically, Iridian Asset Management was the largest shareholder of The Chemours Company (NYSE:CC), with a stake worth $273.6 million reported as of the end of September. Trailing Iridian Asset Management was Adage Capital Management, which amassed a stake valued at $82.3 million. D E Shaw, Luminus Management, and Selz Capital were also very fond of the stock, giving the stock large weights in their portfolios.
Judging by the fact that The Chemours Company (NYSE:CC) has faced a decline in interest from the smart money, it’s easy to see that there is a sect of hedge funds that decided to sell off their entire stakes heading into Q3. It’s worth mentioning that Cliff Asness’s AQR Capital Management cut the biggest position of the “upper crust” of funds tracked by Insider Monkey, worth close to $83.9 million in stock, and Paul Marshall and Ian Wace’s Marshall Wace LLP was right behind this move, as the fund dumped about $55.1 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 3 funds heading into Q3.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as The Chemours Company (NYSE:CC) but similarly valued. We will take a look at EQT Corporation (NYSE:EQT), Owens Corning (NYSE:OC), Zscaler, Inc. (NASDAQ:ZS), and Toll Brothers Inc (NYSE:TOL). This group of stocks’ market caps resemble CC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EQT | 44 | 1317248 | -1 |
| OC | 40 | 838801 | 8 |
| ZS | 17 | 91542 | -11 |
| TOL | 28 | 444730 | -4 |
| Average | 32.25 | 673080 | -2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.25 hedge funds with bullish positions and the average amount invested in these stocks was $673 million. That figure was $497 million in CC’s case. EQT Corporation (NYSE:EQT) is the most popular stock in this table. On the other hand Zscaler, Inc. (NASDAQ:ZS) is the least popular one with only 17 bullish hedge fund positions. The Chemours Company (NYSE:CC) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. A small number of hedge funds were also right about betting on CC as the stock returned 40.3% and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
