Hedge funds run by legendary names like Nelson Peltz and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources on analyzing and uncovering data about small-cap stocks that the big brokerage houses don’t follow. Small caps are where they can generate significant outperformance. That’s why we pay special attention to hedge fund activity in these stocks.
Cott Corporation (NYSE:COT) shareholders have witnessed an increase in hedge fund sentiment lately. COT was in 25 hedge funds’ portfolios at the end of the third quarter of 2018. There were 23 hedge funds in our database with COT positions at the end of the previous quarter. Our calculations also showed that COT isn’t among the 30 most popular stocks among hedge funds.
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 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 18 percentage points since May 2014 through December 3, 2018 (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 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s take a look at the recent hedge fund action encompassing Cott Corporation (NYSE:COT).
Hedge fund activity in Cott Corporation (NYSE:COT)
At the end of the third quarter, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of 9% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards COT over the last 13 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.
According to Insider Monkey’s hedge fund database, Steve Cohen’s Point72 Asset Management has the most valuable position in Cott Corporation (NYSE:COT), worth close to $103.3 million, comprising 0.4% of its total 13F portfolio. On Point72 Asset Management’s heels is Millennium Management, led by Israel Englander, holding a $86.6 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining members of the smart money that are bullish contain Seth Rosen’s Nitorum Capital, Claus Moller’s P2 Capital Partners and John A. Levin’s Levin Capital Strategies.
Now, key money managers have been driving this bullishness. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, established the most valuable position in Cott Corporation (NYSE:COT). Marshall Wace LLP had $8 million invested in the company at the end of the quarter. Clint Murray’s Lodge Hill Capital also initiated a $5 million position during the quarter. The other funds with new positions in the stock are Mark Broach’s Manatuck Hill Partners, Matthew Hulsizer’s PEAK6 Capital Management, and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
Let’s go over hedge fund activity in other stocks similar to Cott Corporation (NYSE:COT). We will take a look at Cision Ltd. (NYSE:CISN), CONMED Corporation (NASDAQ:CNMD), Evolent Health Inc (NYSE:EVH), and Finisar Corporation (NASDAQ:FNSR). This group of stocks’ market values match COT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CISN | 17 | 134540 | 1 |
| CNMD | 21 | 228787 | 3 |
| EVH | 13 | 138711 | -2 |
| FNSR | 13 | 119514 | 2 |
| Average | 16 | 155388 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $155 million. That figure was $582 million in COT’s case. CONMED Corporation (NASDAQ:CNMD) is the most popular stock in this table. On the other hand Evolent Health Inc (NYSE:EVH) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Cott Corporation (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.
Disclosure: None. This article was originally published at Insider Monkey.
