Is TAP Stock A Buy or Sell?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 887 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of December 31st, 2020. In this article we are going to take a look at smart money sentiment towards Molson Coors Beverage Company (NYSE:TAP).

Is TAP stock a buy or sell? Molson Coors Beverage Company (NYSE:TAP) was in 39 hedge funds’ portfolios at the end of December. The all time high for this statistic is 70. TAP has experienced an increase in activity from the world’s largest hedge funds in recent months. There were 33 hedge funds in our database with TAP holdings at the end of September. Our calculations also showed that TAP isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here).

Matthew Hulsizer of PEAK6 Capital

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 10 best battery stocks to buy to identify the next stock with 10x upside potential. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind we’re going to check out the new hedge fund action surrounding Molson Coors Beverage Company (NYSE:TAP).

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

At the end of the fourth quarter, a total of 39 of the hedge funds tracked by Insider Monkey were long this stock, a change of 18% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards TAP over the last 22 quarters. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, holds the largest position in Molson Coors Beverage Company (NYSE:TAP). Arrowstreet Capital has a $108.7 million position in the stock, comprising 0.2% of its 13F portfolio. Coming in second is Cliff Asness of AQR Capital Management, with a $37.4 million position; 0.1% of its 13F portfolio is allocated to the company. Some other professional money managers with similar optimism encompass Renaissance Technologies, Ric Dillon’s Diamond Hill Capital and John W. Rogers’s Ariel Investments. In terms of the portfolio weights assigned to each position Empirical Capital Partners allocated the biggest weight to Molson Coors Beverage Company (NYSE:TAP), around 6.91% of its 13F portfolio. Callodine Capital Management is also relatively very bullish on the stock, dishing out 3.28 percent of its 13F equity portfolio to TAP.

With a general bullishness amongst the heavyweights, some big names were breaking ground themselves. MD Sass, managed by Martin D. Sass, initiated the largest position in Molson Coors Beverage Company (NYSE:TAP). MD Sass had $15.2 million invested in the company at the end of the quarter. Cristan Blackman’s Empirical Capital Partners also initiated a $8.3 million position during the quarter. The following funds were also among the new TAP investors: Matthew Hulsizer’s PEAK6 Capital Management, Michael Burry’s Scion Asset Management, and Orkun Kilic’s Berry Street Capital.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Molson Coors Beverage Company (NYSE:TAP) but similarly valued. These stocks are Algonquin Power & Utilities Corp. (NYSE:AQN), Gaming and Leisure Properties Inc (NASDAQ:GLPI), Dolby Laboratories, Inc. (NYSE:DLB), Five Below Inc (NASDAQ:FIVE), Aramark (NYSE:ARMK), Formula One Group (NASDAQ:FWONK), and Camden Property Trust (NYSE:CPT). This group of stocks’ market values resemble TAP’s market value.

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As you can see these stocks had an average of 31.7 hedge funds with bullish positions and the average amount invested in these stocks was $949 million. That figure was $386 million in TAP’s case. Five Below Inc (NASDAQ:FIVE) is the most popular stock in this table. On the other hand Algonquin Power & Utilities Corp. (NYSE:AQN) is the least popular one with only 15 bullish hedge fund positions. Molson Coors Beverage Company (NYSE:TAP) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TAP is 71.2. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 5.3% in 2021 through March 19th and still beat the market by 0.8 percentage points. Hedge funds were also right about betting on TAP as the stock returned 8.9% since the end of Q4 (through 3/19) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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

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