Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Constellation Brands, Inc. (NYSE:STZ) based on that data and determine whether they were really smart about the stock.
Constellation Brands, Inc. (NYSE:STZ) was in 53 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 71. STZ investors should be aware of an increase in activity from the world’s largest hedge funds in recent months. There were 50 hedge funds in our database with STZ positions at the end of the second quarter. Our calculations also showed that STZ 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. Now we’re going to check out the fresh hedge fund action regarding Constellation Brands, Inc. (NYSE:STZ).
Jeffrey Gates of Gates Capital
Do Hedge Funds Think STZ Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 53 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 6% from the previous quarter. On the other hand, there were a total of 53 hedge funds with a bullish position in STZ a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Citadel Investment Group was the largest shareholder of Constellation Brands, Inc. (NYSE:STZ), with a stake worth $454.3 million reported as of the end of September. Trailing Citadel Investment Group was D E Shaw, which amassed a stake valued at $220.4 million. Arrowstreet Capital, Gates Capital Management, and Citadel Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Kehrs Ridge Capital allocated the biggest weight to Constellation Brands, Inc. (NYSE:STZ), around 7.14% of its 13F portfolio. Franklin Street Capital is also relatively very bullish on the stock, designating 7.07 percent of its 13F equity portfolio to STZ.
Now, key money managers have jumped into Constellation Brands, Inc. (NYSE:STZ) headfirst. Schonfeld Strategic Advisors, managed by Ryan Tolkin (CIO), assembled the largest position in Constellation Brands, Inc. (NYSE:STZ). Schonfeld Strategic Advisors had $14.8 million invested in the company at the end of the quarter. Lee Ainslie’s Maverick Capital also initiated a $8.7 million position during the quarter. The following funds were also among the new STZ investors: Simon Sadler’s Segantii Capital, Brandon Haley’s Holocene Advisors, and Jinghua Yan’s TwinBeech Capital.
Let’s now review hedge fund activity in other stocks similar to Constellation Brands, Inc. (NYSE:STZ). We will take a look at Sempra (NYSE:SRE), Aptiv PLC (NYSE:APTV), Baxter International Inc. (NYSE:BAX), SYSCO Corporation (NYSE:SYY), STMicroelectronics N.V. (NYSE:STM), Cintas Corporation (NASDAQ:CTAS), and Marathon Petroleum Corp (NYSE:MPC). All of these stocks’ market caps resemble STZ’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SRE | 23 | 287269 | -5 |
| APTV | 44 | 1757047 | 4 |
| BAX | 42 | 3485785 | -4 |
| SYY | 29 | 2245599 | -11 |
| STM | 11 | 49115 | -2 |
| CTAS | 36 | 781970 | 15 |
| MPC | 43 | 2688865 | -5 |
| Average | 32.6 | 1613664 | -1.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.6 hedge funds with bullish positions and the average amount invested in these stocks was $1614 million. That figure was $1719 million in STZ’s case. Aptiv PLC (NYSE:APTV) is the most popular stock in this table. On the other hand STMicroelectronics N.V. (NYSE:STM) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Constellation Brands, Inc. (NYSE:STZ) is more popular among hedge funds. Our overall hedge fund sentiment score for STZ is 80.4. 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 returned 29.6% in 2021 and managed to beat the market by another 3.6 percentage points. Hedge funds were also right about betting on STZ as the stock returned 13.2% since the end of September (through 1/31) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
