We at Insider Monkey have gone over 738 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article, we look at what those funds think of Sealed Air Corporation (NYSE:SEE) based on that data.
Sealed Air Corporation (NYSE:SEE) has seen a decrease in hedge fund sentiment lately. SEE was in 29 hedge funds’ portfolios at the end of March. There were 31 hedge funds in our database with SEE positions at the end of the previous quarter. Our calculations also showed that see 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 40 percentage points since May 2014 through May 30, 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 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Michael Lowenstein of Kensico Capital
Let’s review the recent hedge fund action encompassing Sealed Air Corporation (NYSE:SEE).
What does the smart money think about Sealed Air Corporation (NYSE:SEE)?
At the end of the first quarter, a total of 29 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -6% from the fourth quarter of 2018. By comparison, 24 hedge funds held shares or bullish call options in SEE a year ago. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
More specifically, Kensico Capital was the largest shareholder of Sealed Air Corporation (NYSE:SEE), with a stake worth $259.3 million reported as of the end of March. Trailing Kensico Capital was Rivulet Capital, which amassed a stake valued at $202.7 million. Impax Asset Management, Millennium Management, and Nitorum Capital were also very fond of the stock, giving the stock large weights in their portfolios.
Due to the fact that Sealed Air Corporation (NYSE:SEE) has witnessed bearish sentiment from the smart money, it’s safe to say that there exists a select few funds that slashed their entire stakes in the third quarter. Intriguingly, Andreas Halvorsen’s Viking Global dropped the biggest stake of the “upper crust” of funds tracked by Insider Monkey, worth an estimated $29.6 million in stock. Phill Gross and Robert Atchinson’s fund, Adage Capital Management, also dropped its stock, about $6.6 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 2 funds in the third quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Sealed Air Corporation (NYSE:SEE) but similarly valued. We will take a look at Liberty Property Trust (NYSE:LPT), Exelixis, Inc. (NASDAQ:EXEL), Mobile TeleSystems Public Joint Stock Company. (NYSE:MBT), and Zillow Group Inc (NASDAQ:Z). This group of stocks’ market caps are closest to SEE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LPT | 19 | 215440 | 0 |
| EXEL | 24 | 788343 | 0 |
| MBT | 13 | 321821 | 1 |
| Z | 33 | 623335 | 10 |
| Average | 22.25 | 487235 | 2.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.25 hedge funds with bullish positions and the average amount invested in these stocks was $487 million. That figure was $1119 million in SEE’s case. Zillow Group Inc (NASDAQ:Z) is the most popular stock in this table. On the other hand Mobile TeleSystems Public Joint Stock Company. (NYSE:MBT) is the least popular one with only 13 bullish hedge fund positions. Sealed Air Corporation (NYSE:SEE) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately SEE wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on SEE were disappointed as the stock returned -10.4% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
