We know that hedge funds generate strong, risk-adjusted returns over the long run, which is why imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, professional investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do. However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, let’s examine the smart money sentiment towards Carlyle Group Inc (NASDAQ:CG) and determine whether hedge funds skillfully traded this stock.
Carlyle Group Inc (NASDAQ:CG) has seen an increase in activity from the world’s largest hedge funds of late. Carlyle Group Inc (NASDAQ:CG) was in 34 hedge funds’ portfolios at the end of September. The all time high for this statistic was previously 26. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that CG isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Sander Gerber of Hudson Bay Capital
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. Keeping this in mind we’re going to take a look at the latest hedge fund action regarding Carlyle Group Inc (NASDAQ:CG).
Do Hedge Funds Think CG Is A Good Stock To Buy Now?
At Q3’s end, a total of 34 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 62% from the previous quarter. By comparison, 14 hedge funds held shares or bullish call options in CG a year ago. So, let’s find 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, Panayotis Takis Sparaggis’s Alkeon Capital Management has the most valuable position in Carlyle Group Inc (NASDAQ:CG), worth close to $363.3 million, amounting to 0.6% of its total 13F portfolio. The second most bullish fund manager is Samlyn Capital, managed by Robert Pohly, which holds a $229.2 million position; 3.1% of its 13F portfolio is allocated to the stock. Remaining peers that are bullish include Israel Englander’s Millennium Management, Paul Marshall and Ian Wace’s Marshall Wace LLP and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Strycker View Capital allocated the biggest weight to Carlyle Group Inc (NASDAQ:CG), around 4.1% of its 13F portfolio. Samlyn Capital is also relatively very bullish on the stock, dishing out 3.07 percent of its 13F equity portfolio to CG.
As aggregate interest increased, key hedge funds have been driving this bullishness. Balyasny Asset Management, managed by Dmitry Balyasny, established the largest position in Carlyle Group Inc (NASDAQ:CG). Balyasny Asset Management had $58.8 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also initiated a $41.9 million position during the quarter. The following funds were also among the new CG investors: Sander Gerber’s Hudson Bay Capital Management, Allon Hellmann’s Full18 Capital, and Usman Waheed’s Strycker View Capital.
Let’s now review hedge fund activity in other stocks similar to Carlyle Group Inc (NASDAQ:CG). We will take a look at Ceridian HCM Holding Inc. (NYSE:CDAY), Celanese Corporation (NYSE:CE), Bath & Body Works Inc. (NYSE:BBWI), Full Truck Alliance Co. Ltd. (NYSE:YMM), Brookfield Infrastructure Partners L.P. (NYSE:BIP), Liberty Global plc (NASDAQ:LBTYA), and Signature Bank (NASDAQ:SBNY). All of these stocks’ market caps are closest to CG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CDAY | 20 | 1798355 | -5 |
| CE | 26 | 735190 | -11 |
| BBWI | 56 | 6556642 | 3 |
| YMM | 13 | 263866 | 13 |
| BIP | 15 | 104470 | -1 |
| LBTYA | 34 | 791291 | 4 |
| SBNY | 46 | 950619 | 3 |
| Average | 30 | 1600062 | 0.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 30 hedge funds with bullish positions and the average amount invested in these stocks was $1600 million. That figure was $1402 million in CG’s case. Bath & Body Works Inc. (NYSE:BBWI) is the most popular stock in this table. On the other hand Full Truck Alliance Co. Ltd. (NYSE:YMM) is the least popular one with only 13 bullish hedge fund positions. Carlyle Group Inc (NASDAQ:CG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CG is 64.4. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. Hedge funds were also right about betting on CG as the stock returned 8.4% since the end of Q3 (through 1/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Carlyle Group Inc. (NASDAQ:CG)
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Disclosure: None. This article was originally published at Insider Monkey.
