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 Sealed Air Corporation (NYSE:SEE) and determine whether hedge funds skillfully traded this stock.
Is Sealed Air Corporation (NYSE:SEE) the right investment to pursue these days? The best stock pickers were getting more optimistic. The number of long hedge fund bets improved by 5 lately. Sealed Air Corporation (NYSE:SEE) was in 33 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 49. Our calculations also showed that SEE 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. Keeping this in mind we’re going to view the new hedge fund action surrounding Sealed Air Corporation (NYSE:SEE).
Michael Lowenstein of Kensico Capital
Do Hedge Funds Think SEE Is A Good Stock To Buy Now?
At third quarter’s end, a total of 33 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 18% from the second quarter of 2021. On the other hand, there were a total of 31 hedge funds with a bullish position in SEE a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Sealed Air Corporation (NYSE:SEE) was held by Rivulet Capital, which reported holding $176.3 million worth of stock at the end of September. It was followed by Kensico Capital with a $171.7 million position. Other investors bullish on the company included Nitorum Capital, Impax Asset Management, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Rivulet Capital allocated the biggest weight to Sealed Air Corporation (NYSE:SEE), around 9.2% of its 13F portfolio. Kensico Capital is also relatively very bullish on the stock, dishing out 5.28 percent of its 13F equity portfolio to SEE.
With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Tudor Investment Corp, managed by Paul Tudor Jones, assembled the largest position in Sealed Air Corporation (NYSE:SEE). Tudor Investment Corp had $7.5 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also made a $5.1 million investment in the stock during the quarter. The other funds with new positions in the stock are Jinghua Yan’s TwinBeech Capital, Richard SchimeláandáLawrence Sapanski’s Cinctive Capital Management, and Qing Li’s Sciencast Management.
Let’s check out hedge fund activity in other stocks similar to Sealed Air Corporation (NYSE:SEE). We will take a look at Under Armour Inc (NYSE:UA), Rexford Industrial Realty Inc (NYSE:REXR), Phillips 66 Partners LP (NYSE:PSXP), The Scotts Miracle-Gro Company (NYSE:SMG), Ralph Lauren Corporation (NYSE:RL), Pinnacle West Capital Corporation (NYSE:PNW), and Arrival (NASDAQ:ARVL). This group of stocks’ market valuations are similar to SEE’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| UA | 48 | 1643556 | -3 |
| REXR | 29 | 358442 | 8 |
| PSXP | 5 | 31682 | 0 |
| SMG | 30 | 257473 | -2 |
| RL | 25 | 444724 | -7 |
| PNW | 21 | 175044 | 3 |
| ARVL | 4 | 10081 | -13 |
| Average | 23.1 | 417286 | -2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.1 hedge funds with bullish positions and the average amount invested in these stocks was $417 million. That figure was $627 million in SEE’s case. Under Armour Inc (NYSE:UA) is the most popular stock in this table. On the other hand Arrival (NASDAQ:ARVL) is the least popular one with only 4 bullish hedge fund positions. Sealed Air Corporation (NYSE:SEE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SEE is 63.2. 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 SEE as the stock returned 24.4% since the end of Q3 (through 1/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Sealed Air Corp (NYSE:SEE)
Follow Sealed Air Corp (NYSE:SEE)
Suggested Articles:
- Top 20 Richest People In The World
- 15 Best Stocks To Buy Now For Beginner Investors
- 25 Most Climate-Resilient Cities in the US
Disclosure: None. This article was originally published at Insider Monkey.
