The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 873 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th. In this article we look at what those investors think of Caesars Entertainment Inc. (NASDAQ:CZR).
Caesars Entertainment Inc. (NASDAQ:CZR) has seen a decrease in enthusiasm from smart money lately. Caesars Entertainment Inc. (NASDAQ:CZR) was in 73 hedge funds’ portfolios at the end of June. The all time high for this statistic is 76. There were 76 hedge funds in our database with CZR positions at the end of the first quarter. Our calculations also showed that CZR isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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 79 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.
Robert Pohly of Samlyn Capital
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Do Hedge Funds Think CZR Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 73 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -4% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards CZR over the last 24 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Israel Englander’s Millennium Management has the number one position in Caesars Entertainment Inc. (NASDAQ:CZR), worth close to $196.1 million, comprising 0.1% of its total 13F portfolio. The second most bullish fund manager is Samlyn Capital, led by Robert Pohly, holding a $167.2 million position; the fund has 2.5% of its 13F portfolio invested in the stock. Other peers with similar optimism encompass Jeffrey Gates’s Gates Capital Management, Peter S. Park’s Park West Asset Management and Gaurav Kapadia’s XN Exponent Advisors. In terms of the portfolio weights assigned to each position Lafitte Capital Management allocated the biggest weight to Caesars Entertainment Inc. (NASDAQ:CZR), around 34.36% of its 13F portfolio. 1060 Capital Management is also relatively very bullish on the stock, earmarking 16.27 percent of its 13F equity portfolio to CZR.
Since Caesars Entertainment Inc. (NASDAQ:CZR) has witnessed declining sentiment from the aggregate hedge fund industry, logic holds that there was a specific group of hedgies who were dropping their positions entirely in the second quarter. Interestingly, David Costen Haley’s HBK Investments cut the biggest stake of the “upper crust” of funds monitored by Insider Monkey, valued at an estimated $187.9 million in stock, and Andrew Weiss’s Weiss Asset Management was right behind this move, as the fund dumped about $64.5 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 3 funds in the second quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Caesars Entertainment Inc. (NASDAQ:CZR) but similarly valued. These stocks are Xylem Inc (NYSE:XYL), Fox Corporation (NASDAQ:FOXA), PPL Corporation (NYSE:PPL), 10x Genomics, Inc. (NASDAQ:TXG), PT Telekomunikasi Indonesia (NYSE:TLK), Tractor Supply Company (NASDAQ:TSCO), and Burlington Stores Inc (NYSE:BURL). This group of stocks’ market valuations are closest to CZR’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| XYL | 23 | 931677 | 0 |
| FOXA | 35 | 441270 | -3 |
| PPL | 23 | 417630 | -2 |
| TXG | 28 | 1447446 | 5 |
| TLK | 5 | 108737 | 1 |
| TSCO | 38 | 1374315 | 9 |
| BURL | 43 | 1690108 | 11 |
| Average | 27.9 | 915883 | 3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.9 hedge funds with bullish positions and the average amount invested in these stocks was $916 million. That figure was $1840 million in CZR’s case. Burlington Stores Inc (NYSE:BURL) is the most popular stock in this table. On the other hand PT Telekomunikasi Indonesia (NYSE:TLK) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Caesars Entertainment Inc. (NASDAQ:CZR) is more popular among hedge funds. Our overall hedge fund sentiment score for CZR is 80.8. 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 24.1% in 2021 through September 20th and still beat the market by 6.9 percentage points. Unfortunately CZR wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CZR were disappointed as the stock returned 1% since the end of the second quarter (through 9/20) 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.
Follow Caesars Entertainment Inc. (NASDAQ:CZR)
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Disclosure: None. This article was originally published at Insider Monkey.
