Is CCC Intelligent Solutions Holdings Inc. (CCCS) Going to Burn These Hedge Funds?

While the market driven by short-term sentiment influenced by the accommodative interest rate environment in the US, virus news and stimulus spending, many smart money investors are starting to get cautious towards the current bull run since March, 2020 and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 40,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding CCC Intelligent Solutions Holdings Inc. (NYSE:CCCS).

Is CCC Intelligent Solutions Holdings Inc. (NYSE:CCCS) going to take off soon? Hedge funds were in a bullish mood. The number of bullish hedge fund bets rose by 28 in recent months. CCC Intelligent Solutions Holdings Inc. (NYSE:CCCS) was in 28 hedge funds’ portfolios at the end of September. Our calculations also showed that CCCS isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. With all of this in mind we’re going to analyze the recent hedge fund action encompassing CCC Intelligent Solutions Holdings Inc. (NYSE:CCCS).

Alex Sacerdote of Whale Rock Capital Management

Do Hedge Funds Think CCCS Is A Good Stock To Buy Now?

At the end of September, a total of 28 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 28 from the second quarter of 2021. By comparison, 0 hedge funds held shares or bullish call options in CCCS a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, Whale Rock Capital Management, managed by Alex Sacerdote, holds the biggest position in CCC Intelligent Solutions Holdings Inc. (NYSE:CCCS). Whale Rock Capital Management has a $70.8 million position in the stock, comprising 0.5% of its 13F portfolio. On Whale Rock Capital Management’s heels is Lee Ainslie of Maverick Capital, with a $33 million position; 0.3% of its 13F portfolio is allocated to the company. Some other professional money managers with similar optimism comprise David Zorub’s Parsifal Capital Management, Larry Robbins’s Glenview Capital and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners. In terms of the portfolio weights assigned to each position Parsifal Capital Management allocated the biggest weight to CCC Intelligent Solutions Holdings Inc. (NYSE:CCCS), around 1.84% of its 13F portfolio. MIC Capital Partners is also relatively very bullish on the stock, dishing out 1.25 percent of its 13F equity portfolio to CCCS.

With a general bullishness amongst the heavyweights, some big names were breaking ground themselves. Whale Rock Capital Management, managed by Alex Sacerdote, established the biggest position in CCC Intelligent Solutions Holdings Inc. (NYSE:CCCS). Whale Rock Capital Management had $70.8 million invested in the company at the end of the quarter. Lee Ainslie’s Maverick Capital also made a $33 million investment in the stock during the quarter. The following funds were also among the new CCCS investors: David Zorub’s Parsifal Capital Management, Larry Robbins’s Glenview Capital, and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners.

Let’s go over hedge fund activity in other stocks similar to CCC Intelligent Solutions Holdings Inc. (NYSE:CCCS). We will take a look at iQIYI, Inc. (NASDAQ:IQ), Kingsoft Cloud Holdings Limited (NASDAQ:KC), HUTCHMED (China) Limited (NASDAQ:HCM), Perrigo Co Plc (NYSE:PRGO), Columbia Sportswear Company (NASDAQ:COLM), Rapid7 Inc (NASDAQ:RPD), and Houlihan Lokey Inc (NYSE:HLI). This group of stocks’ market values are similar to CCCS’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.6 hedge funds with bullish positions and the average amount invested in these stocks was $227 million. That figure was $228 million in CCCS’s case. Rapid7 Inc (NASDAQ:RPD) is the most popular stock in this table. On the other hand HUTCHMED (China) Limited (NASDAQ:HCM) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks CCC Intelligent Solutions Holdings Inc. (NYSE:CCCS) is more popular among hedge funds. Our overall hedge fund sentiment score for CCCS is 90. 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 returned 31.1% in 2021 through December 9th but still managed to beat the market by 5.1 percentage points. Hedge funds were also right about betting on CCCS as the stock returned 12.5% since the end of September (through 12/9) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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Disclosure: None. This article was originally published at Insider Monkey.