Is Corporacion America Airports SA (NYSE:CAAP) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before doing days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also have numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Corporacion America Airports SA (NYSE:CAAP) was in 13 hedge funds’ portfolios at the end of December. CAAP has seen a decrease in enthusiasm from smart money lately. There were 14 hedge funds in our database with CAAP holdings at the end of the previous quarter. Our calculations also showed that CAAP isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s take a look at the key hedge fund action encompassing Corporacion America Airports SA (NYSE:CAAP).
What have hedge funds been doing with Corporacion America Airports SA (NYSE:CAAP)?
At Q4’s end, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -7% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CAAP over the last 14 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Key Square Capital Management was the largest shareholder of Corporacion America Airports SA (NYSE:CAAP), with a stake worth $11.4 million reported as of the end of December. Trailing Key Square Capital Management was Makaira Partners, which amassed a stake valued at $9.7 million. Newtyn Management, Crestwood Capital Management, and Sloane Robinson Investment Management were also very fond of the stock, giving the stock large weights in their portfolios.
Judging by the fact that Corporacion America Airports SA (NYSE:CAAP) has faced falling interest from the entirety of the hedge funds we track, we can see that there lies a certain “tier” of hedgies who were dropping their full holdings heading into Q3. Interestingly, Paul Marshall and Ian Wace’s Marshall Wace LLP dropped the biggest investment of the “upper crust” of funds followed by Insider Monkey, valued at about $1.7 million in stock, and Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC was right behind this move, as the fund said goodbye to about $0.8 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds heading into Q3.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Corporacion America Airports SA (NYSE:CAAP) but similarly valued. These stocks are Sun Hydraulics Corporation (NASDAQ:SNHY), Mr. Cooper Group Inc. (NASDAQ:COOP), CSG Systems International, Inc. (NASDAQ:CSGS), and Sykes Enterprises, Incorporated (NASDAQ:SYKE). This group of stocks’ market caps resemble CAAP’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SNHY | 3 | 80188 | -5 |
| COOP | 28 | 419733 | -3 |
| CSGS | 15 | 133495 | 1 |
| SYKE | 16 | 39663 | 0 |
| Average | 15.5 | 168270 | -1.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.5 hedge funds with bullish positions and the average amount invested in these stocks was $168 million. That figure was $39 million in CAAP’s case. Mr. Cooper Group Inc. (NASDAQ:COOP) is the most popular stock in this table. On the other hand Sun Hydraulics Corporation (NASDAQ:SNHY) is the least popular one with only 3 bullish hedge fund positions. Corporacion America Airports SA (NYSE:CAAP) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. A small number of hedge funds were also right about betting on CAAP, though not to the same extent, as the stock returned 22.2% and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.