It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. The Standard and Poor’s 500 Index returned 7.6% over the 12-month period ending November 21, while more than 51% of the constituents of the index underperformed the benchmark. Hence, a random stock picking process will most likely lead to disappointment. At the same time, the 30 most favored mid-cap stocks by the best performing hedge funds monitored by Insider Monkey generated a return of 18% over the same time span. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in Cott Corporation (USA) (NYSE:COT) .
Is Cott Corporation (USA) (NYSE:COT) an attractive investment now? It looks like the best stock pickers are taking an optimistic view. During the third quarter, the number of funds from our database bullish on the company surged by seven to 22. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Allegheny Technologies Incorporated (NYSE:ATI), International Bancshares Corp (NASDAQ:IBOC), and SolarCity Corp (NASDAQ:SCTY) to gather more data points.
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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Keeping this in mind, we’re going to review the fresh action surrounding Cott Corporation (USA) (NYSE:COT).
What have hedge funds been doing with Cott Corporation (USA) (NYSE:COT)?
At Q3’s end, 22 funds tracked by Insider Monkey were bullish on Cott Corporation, up by 47% from the end of the second quarter. On the other hand, there were a total of 19 hedge funds with a bullish position in COT at the beginning of this year. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, John A. Levin’s Levin Capital Strategies has the largest position in Cott Corporation (USA) (NYSE:COT), worth close to $207.7 million, accounting for 3.1% of its total 13F portfolio. The second most bullish fund is Jim Simons’ Renaissance Technologies, with a $56 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish consist of Claus Moller’s P2 Capital Partners, Israel Englander’s Millennium Management and Principal Global Investors’ Columbus Circle Investors. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
As aggregate interest increased, key hedge funds were breaking ground themselves. Columbus Circle Investors assembled the largest position in Cott Corporation (USA) (NYSE:COT). Columbus Circle Investors had $12.4 million invested in the company at the end of the quarter. Joe DiMenna’s ZWEIG DIMENNA PARTNERS also initiated a $3.2 million position during the quarter. The other funds with brand new COT positions are Matthew Hulsizer’s PEAK6 Capital Management, Ken Griffin’s Citadel Investment Group, and Adam Usdan’s Trellus Management Company.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Cott Corporation (USA) (NYSE:COT) but similarly valued. These stocks are Allegheny Technologies Incorporated (NYSE:ATI), International Bancshares Corp (NASDAQ:IBOC), SolarCity Corp (NASDAQ:SCTY), and Cohen & Steers, Inc. (NYSE:CNS). This group of stocks’ market values resemble COT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ATI | 13 | 183180 | -4 |
| IBOC | 10 | 37911 | -1 |
| SCTY | 19 | 82586 | -7 |
| CNS | 9 | 104415 | 1 |
As you can see these stocks had an average of 13 funds with bullish positions and the average amount invested in these stocks was $102 million, versus $371 million in COT’s case. SolarCity Corp (NASDAQ:SCTY) is the most popular stock in this table, while Cohen & Steers, Inc. (NYSE:CNS) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Cott Corporation (USA) (NYSE:COT) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: none
