Many investors, including Carl Icahn or Stan Druckenmiller, have been saying for a while now that the current market is overvalued due to a low interest rate environment that leads to companies swapping their equity for debt and focusing mostly on short-term performance such as beating the quarterly earnings estimates. In the third quarter, many investors lost money due to unpredictable events such as the concerns over Valeant’s drug pricing policy that led to an overall drop among pharma stocks. Nevertheless, many of the stocks that tanked in the third quarter still sport strong fundamentals and their decline was more related to the general market sentiment rather than their individual performance and hedge funds kept their bullish stance. In this article we will find out how hedge fund sentiment to Cott Corporation (USA) (NYSE:COT) changed recently.
Is Cott Corporation (USA) a good investment now? Money managers are in a bullish mood. The number of long hedge fund positions rose by 4 in recent months. COT was in 23 hedge funds’ portfolios at the end of September. There were 19 hedge funds in our database with COT holdings at the end of the previous quarter. At the end of this article we will also compare COT to other stocks including Finisar Corporation (NASDAQ:FNSR), TriNet Group Inc (NYSE:TNET), and Ramco-Gershenson Properties Trust (NYSE:RPT) to get a better sense of its popularity.
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Keeping this in mind, let’s take a glance at the latest action surrounding Cott Corporation (USA) (NYSE:COT).
How have hedgies been trading Cott Corporation (USA) (NYSE:COT)?
At Q3’s end, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of 21% from the second quarter. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, John A. Levin’s Levin Capital Strategies has the biggest position in Cott Corporation (USA) (NYSE:COT), worth close to $147.3 million, corresponding to 2.5% of its total 13F portfolio. On Levin Capital Strategies’s heels is Renaissance Technologies, led by Jim Simons, holding a $29.7 million position; 0.1% of its 13F portfolio is allocated to the company. Some other members of the smart money that hold long positions include D E Shaw, Phill Gross and Robert Atchinson’s Adage Capital Management and Peter S. Park’s Park West Asset Management.
Now, specific money managers were breaking ground themselves. Gotham Asset Management, managed by Joel Greenblatt, initiated the biggest position in Cott Corporation (USA) (NYSE:COT). Gotham Asset Management had $5.8 million invested in the company at the end of the quarter. Brad Dunkley and Blair Levinsky’s Waratah Capital Advisors also initiated a $5.1 million position during the quarter. The following funds were also among the new COT investors: Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Neil Chriss’ Hutchin Hill Capital, and Peter Muller’s PDT Partners.
Let’s check out hedge fund activity in other stocks similar to Cott Corporation (USA) (NYSE:COT). We will take a look at Finisar Corporation (NASDAQ:FNSR), TriNet Group Inc (NYSE:TNET), Ramco-Gershenson Properties Trust (NYSE:RPT), and TASER International, Inc. (NASDAQ:TASR). This group of stocks’ market caps are similar to COT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FNSR | 19 | 150631 | 0 |
| TNET | 17 | 164159 | -8 |
| RPT | 16 | 63430 | 1 |
| TASR | 15 | 91605 | -3 |
As you can see these stocks had an average of 16.75 hedge funds with bullish positions and the average amount invested in these stocks was $117 million. That figure was $256 million in COT’s case. Finisar Corporation (NASDAQ:FNSR) is the most popular stock in this table. On the other hand TASER International, Inc. (NASDAQ:TASR) is the least popular one with only 15 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.
