As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the fourth quarter of 2019. A significant number of hedge funds continued their strong performance in 2020 and 2021 as well. We get to see hedge funds’ thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Constellium SE (NYSE:CSTM).
Is Constellium SE (CSTM) a good stock to buy now? The best stock pickers were getting more optimistic. The number of bullish hedge fund positions advanced by 1 lately. Constellium SE (NYSE:CSTM) was in 29 hedge funds’ portfolios at the end of September. The all time high for this statistic is 50. Our calculations also showed that CSTM isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 28 hedge funds in our database with CSTM holdings at the end of June.
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 take a look at the latest hedge fund action regarding Constellium SE (NYSE:CSTM).
Robert Pohly of Samlyn Capital
Do Hedge Funds Think CSTM Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 29 of the hedge funds tracked by Insider Monkey were long this stock, a change of 4% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CSTM over the last 25 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Jared Nussbaum’s Nut Tree Capital has the biggest position in Constellium SE (NYSE:CSTM), worth close to $62 million, comprising 13.2% of its total 13F portfolio. On Nut Tree Capital’s heels is Samlyn Capital, led by Robert Pohly, holding a $42.8 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Other peers that hold long positions encompass Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, Larry Foley and Paul Farrell’s Bronson Point Partners and Alexander Mitchell’s Scopus Asset Management. In terms of the portfolio weights assigned to each position Bronson Point Partners allocated the biggest weight to Constellium SE (NYSE:CSTM), around 13.38% of its 13F portfolio. Nut Tree Capital is also relatively very bullish on the stock, dishing out 13.17 percent of its 13F equity portfolio to CSTM.
As industrywide interest jumped, some big names have jumped into Constellium SE (NYSE:CSTM) headfirst. Renaissance Technologies, initiated the most valuable position in Constellium SE (NYSE:CSTM). Renaissance Technologies had $1.8 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also initiated a $1.5 million position during the quarter. The other funds with new positions in the stock are Allan Teh’s Kamunting Street Capital, Ryan Caldwell’s Chiron Investment Management, and Mika Toikka’s AlphaCrest Capital Management.
Let’s now review hedge fund activity in other stocks similar to Constellium SE (NYSE:CSTM). These stocks are Helios Technologies, Inc. (NYSE::HLIO), MGE Energy, Inc. (NASDAQ:MGEE), Fulgent Genetics, Inc. (NASDAQ:FLGT), Hilltop Holdings Inc. (NYSE:HTH), Sprouts Farmers Market Inc (NASDAQ:SFM), SolarWinds Corporation (NYSE:SWI), and Visteon Corp (NASDAQ:VC). This group of stocks’ market valuations are closest to CSTM’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HLIO | 10 | 58505 | 1 |
| MGEE | 8 | 28083 | 3 |
| FLGT | 17 | 105455 | 4 |
| HTH | 14 | 40390 | 6 |
| SFM | 24 | 214761 | -1 |
| SWI | 15 | 1093082 | -6 |
| VC | 20 | 163791 | 0 |
| Average | 15.4 | 243438 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.4 hedge funds with bullish positions and the average amount invested in these stocks was $243 million. That figure was $290 million in CSTM’s case. Sprouts Farmers Market Inc (NASDAQ:SFM) is the most popular stock in this table. On the other hand MGE Energy, Inc. (NASDAQ:MGEE) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Constellium SE (NYSE:CSTM) is more popular among hedge funds. Our overall hedge fund sentiment score for CSTM is 73.4. 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately CSTM wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CSTM were disappointed as the stock returned -6.4% since the end of the third quarter (through 11/30) 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.
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Disclosure: None. This article was originally published at Insider Monkey.
