Is Cano Health Inc. (NYSE:CANO) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is Cano Health Inc. (NYSE:CANO) a buy right now? Money managers were taking an optimistic view. The number of long hedge fund bets advanced by 37 recently. Cano Health Inc. (NYSE:CANO) was in 37 hedge funds’ portfolios at the end of the third quarter of 2021. Our calculations also showed that CANO isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
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 glance at the fresh hedge fund action regarding Cano Health Inc. (NYSE:CANO).
Dan Loeb of Third Point
Do Hedge Funds Think CANO Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 37 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 37 from one quarter earlier. The graph below displays the number of hedge funds with bullish position in CANO over the last 25 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.
The largest stake in Cano Health Inc. (NYSE:CANO) was held by Third Point, which reported holding $140.5 million worth of stock at the end of September. It was followed by Suvretta Capital Management with a $106.8 million position. Other investors bullish on the company included Maverick Capital, Millennium Management, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Cobalt Capital Management allocated the biggest weight to Cano Health Inc. (NYSE:CANO) , around 3.2% of its 13F portfolio. Falcon Edge Capital is also relatively very bullish on the stock, earmarking 2.24 percent of its 13F equity portfolio to CANO.
With a general bullishness amongst the heavyweights, some big names were leading the bulls’ herd. Healthcor Management LP, managed by Arthur B Cohen and Joseph Healey, initiated the biggest position in Cano Health Inc. (NYSE:CANO) . Healthcor Management LP had $34.9 million invested in the company at the end of the quarter. Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners also initiated a $30 million position during the quarter. The other funds with brand new CANO positions are Efrem Kamen’s Pura Vida Investments, Renaissance Technologies, and Joseph Samuels’s Islet Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Cano Health Inc. (NYSE:CANO) but similarly valued. We will take a look at Compass Minerals International, Inc. (NYSE:CMP), Sonic Automotive Inc (NYSE:SAH), Gray Television, Inc. (NYSE:GTN), NanoString Technologies Inc (NASDAQ:NSTG), Liberty Oilfield Services Inc. (NYSE:LBRT), Columbia Property Trust Inc (NYSE:CXP), and Harmony Biosciences Holdings, Inc. (NASDAQ:HRMY). This group of stocks’ market values resemble CANO’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CMP | 14 | 80089 | -1 |
| SAH | 26 | 156146 | 6 |
| GTN | 20 | 74130 | 0 |
| NSTG | 26 | 454375 | 1 |
| LBRT | 7 | 17020 | -13 |
| CXP | 20 | 307842 | 2 |
| HRMY | 19 | 303691 | 4 |
| Average | 18.9 | 199042 | -0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.9 hedge funds with bullish positions and the average amount invested in these stocks was $199 million. That figure was $873 million in CANO’s case. Sonic Automotive Inc (NYSE:SAH) is the most popular stock in this table. On the other hand Liberty Oilfield Services Inc. (NYSE:LBRT) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Cano Health Inc. (NYSE:CANO) is more popular among hedge funds. Our overall hedge fund sentiment score for CANO is 90. 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 CANO wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CANO were disappointed as the stock returned -26.3% 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.