The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. Hedge funds’ consensus stock picks performed spectacularly over the last 3 years, but 2022 hasn’t been kind to hedge funds. In this article we look at how hedge funds traded Caesars Entertainment Inc. (NASDAQ:CZR) and determine whether the smart money was really smart about this stock.
Caesars Entertainment Inc. (NASDAQ:CZR) has seen a decrease in enthusiasm from smart money of late. Caesars Entertainment Inc. (NASDAQ:CZR) was in 64 hedge funds’ portfolios at the end of September. The all time high for this statistic is 76. Our calculations also showed that CZR isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Jeffrey Gates of Gates 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. With all of this in mind we’re going to take a gander at the new hedge fund action regarding Caesars Entertainment Inc. (NASDAQ:CZR).
Do Hedge Funds Think CZR Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 64 of the hedge funds tracked by Insider Monkey were long this stock, a change of -12% from the previous quarter. On the other hand, there were a total of 74 hedge funds with a bullish position in CZR a year ago. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
The largest stake in Caesars Entertainment Inc. (NASDAQ:CZR) was held by Samlyn Capital, which reported holding $226 million worth of stock at the end of September. It was followed by Park West Asset Management with a $219.9 million position. Other investors bullish on the company included Jericho Capital Asset Management, XN Exponent Advisors, and Gates Capital Management. In terms of the portfolio weights assigned to each position Lafitte Capital Management allocated the biggest weight to Caesars Entertainment Inc. (NASDAQ:CZR), around 35.48% of its 13F portfolio. 1060 Capital Management is also relatively very bullish on the stock, setting aside 17.63 percent of its 13F equity portfolio to CZR.
Seeing as Caesars Entertainment Inc. (NASDAQ:CZR) has witnessed bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there exists a select few funds that slashed their positions entirely heading into Q4. Intriguingly, Glen Kacher’s Light Street Capital cut the largest stake of the 750 funds tracked by Insider Monkey, comprising close to $22.8 million in stock. Brandon Haley’s fund, Holocene Advisors, also dropped its stock, about $22.4 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 9 funds heading into Q4.
Let’s also examine hedge fund activity in other stocks similar to Caesars Entertainment Inc. (NASDAQ:CZR). We will take a look at Credit Suisse Group AG (NYSE:CS), Rogers Communications Inc. (NYSE:RCI), Splunk Inc (NASDAQ:SPLK), Tractor Supply Company (NASDAQ:TSCO), Fox Corporation (NASDAQ:FOXA), DISH Network Corp. (NASDAQ:DISH), and Verisign, Inc. (NASDAQ:VRSN). All of these stocks’ market caps are similar to CZR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CS | 8 | 76139 | -2 |
| RCI | 17 | 366650 | 0 |
| SPLK | 47 | 1251280 | 0 |
| TSCO | 33 | 1218656 | -5 |
| FOXA | 32 | 616945 | -3 |
| DISH | 51 | 2439908 | 0 |
| VRSN | 40 | 5398949 | -1 |
| Average | 32.6 | 1624075 | -1.6 |
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 $1624 million. That figure was $1883 million in CZR’s case. DISH Network Corp. (NASDAQ:DISH) is the most popular stock in this table. On the other hand Credit Suisse Group AG (NYSE:CS) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Caesars Entertainment Inc. (NASDAQ:CZR) is more popular among hedge funds. Our overall hedge fund sentiment score for CZR is 71.3. 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. Unfortunately, CZR wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CZR were disappointed as the stock returned -32.2% since the end of the third quarter (through 1/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as all of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
