At Insider Monkey, we pore over the filings of more than 700 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not Compania Cervecerias Unidas S.A. (ADR) (NYSE:CCU) makes for a good investment right now.
Compania Cervecerias Unidas S.A. (ADR) (NYSE:CCU) has experienced an increase in enthusiasm from smart money lately. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article, we will examine companies such as Biomed Realty Trust Inc (NYSE:BMR), American Campus Communities, Inc. (NYSE:ACC), and AGCO Corporation (NYSE:AGCO) to gather more data points.
Follow Compania Cervecerias Unidas S A (NYSE:CCU)
Follow Compania Cervecerias Unidas S A (NYSE:CCU)
In the financial world, there are several metrics stock market investors have at their disposal to analyze their stock investments. A couple of the most innovative metrics are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the top picks of the top hedge fund managers can outperform their index-focused peers by a superb amount (see the details here).
Now, let’s review the key action encompassing Compania Cervecerias Unidas S.A. (ADR) (NYSE:CCU).
What have hedge funds been doing with Compania Cervecerias Unidas S.A. (ADR) (NYSE:CCU)?
At the end of the third quarter, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 33% from the second quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, William Duhamel’s Route One Investment Company has the largest position in Compania Cervecerias Unidas S.A. (ADR) (NYSE:CCU), worth close to $95.2 million, corresponding to 5.6% of its total 13F portfolio. Sitting at the No. 2 spot is Royce & Associates, led by Chuck Royce, holding a $11.1 million position; 0.1% of its 13F portfolio is allocated to the company. Some other members of the smart money with similar optimism include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Renaissance Technologies, and D E Shaw.
As aggregate interest increased, key money managers have been driving this bullishness. Arrowstreet Capital initiated the biggest position in Compania Cervecerias Unidas S.A. (ADR) (NYSE:CCU). Arrowstreet Capital had $5.5 million invested in the company at the end of the quarter. Robert B. Gillam’s McKinley Capital Management also made a $0.7 million investment in the stock during the quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Compania Cervecerias Unidas S.A. (ADR) (NYSE:CCU) but similarly valued. We will take a look at Biomed Realty Trust Inc (NYSE:BMR), American Campus Communities, Inc. (NYSE:ACC), AGCO Corporation (NYSE:AGCO), and Credit Acceptance Corp. (NASDAQ:CACC). This group of stocks’ market caps is similar to Compania Cervecerias Unidas S.A. (ADR) (NYSE:CCU)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BMR | 17 | 223498 | 6 |
| ACC | 15 | 105800 | 3 |
| AGCO | 24 | 519980 | 8 |
| CACC | 19 | 528581 | 0 |
As you can see, these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $344 million. That figure was $227 million in Compania Cervecerias Unidas S.A. (ADR) (NYSE:CCU)’s case. AGCO Corporation (NYSE:AGCO) is the most popular stock in this table. On the other hand, American Campus Communities, Inc. (NYSE:ACC) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks, Compania Cervecerias Unidas S.A. (ADR) (NYSE:CCU) is even less popular than American Campus Communities, Inc. (NYSE:ACC). Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case, more research is warranted.
