With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter of 2021. One of these stocks was Campbell Soup Company (NYSE:CPB).
Is CPB a good stock to buy? The best stock pickers were selling. The number of long hedge fund bets went down by 1 recently. Campbell Soup Company (NYSE:CPB) was in 28 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 40. Our calculations also showed that CPB isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 29 hedge funds in our database with CPB positions at the end of the fourth quarter.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now let’s take a look at the latest hedge fund action regarding Campbell Soup Company (NYSE:CPB).
Do Hedge Funds Think CPB Is A Good Stock To Buy Now?
At Q1’s end, a total of 28 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -3% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CPB over the last 23 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Campbell Soup Company (NYSE:CPB), with a stake worth $125 million reported as of the end of March. Trailing Renaissance Technologies was Armistice Capital, which amassed a stake valued at $46.4 million. Arrowstreet Capital, Citadel Investment Group, and Balyasny Asset Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Kehrs Ridge Capital allocated the biggest weight to Campbell Soup Company (NYSE:CPB), around 2.96% of its 13F portfolio. Armistice Capital is also relatively very bullish on the stock, earmarking 1.07 percent of its 13F equity portfolio to CPB.
Since Campbell Soup Company (NYSE:CPB) has faced a decline in interest from hedge fund managers, we can see that there exists a select few hedge funds who were dropping their full holdings last quarter. Interestingly, Lee Ainslie’s Maverick Capital cut the largest investment of the 750 funds monitored by Insider Monkey, comprising about $6.6 million in stock. Greg Eisner’s fund, Engineers Gate Manager, also sold off its stock, about $0.9 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 1 funds last quarter.
Let’s go over hedge fund activity in other stocks similar to Campbell Soup Company (NYSE:CPB). We will take a look at PagSeguro Digital Ltd. (NYSE:PAGS), Cenovus Energy Inc (NYSE:CVE), VICI Properties Inc. (NYSE:VICI), GDS Holdings Limited (NASDAQ:GDS), Entegris Inc (NASDAQ:ENTG), Eastman Chemical Company (NYSE:EMN), and Franklin Resources, Inc. (NYSE:BEN). This group of stocks’ market values resemble CPB’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PAGS | 33 | 1804603 | 8 |
| CVE | 23 | 379693 | 0 |
| VICI | 41 | 875487 | 3 |
| GDS | 40 | 2080333 | 1 |
| ENTG | 23 | 1484733 | -7 |
| EMN | 27 | 162100 | -4 |
| BEN | 31 | 198221 | -2 |
| Average | 31.1 | 997881 | -0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.1 hedge funds with bullish positions and the average amount invested in these stocks was $998 million. That figure was $345 million in CPB’s case. VICI Properties Inc. (NYSE:VICI) is the most popular stock in this table. On the other hand Cenovus Energy Inc (NYSE:CVE) is the least popular one with only 23 bullish hedge fund positions. Campbell Soup Company (NYSE:CPB) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CPB is 38.9. 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. 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 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% in 2021 through July 9th and surpassed the market again by 6.7 percentage points. Unfortunately CPB wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); CPB investors were disappointed as the stock returned -8.5% since the end of March (through 7/9) 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 in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.
