Were Hedge Funds Illusioned With Coupang, Inc. (CPNG)?

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 Coupang, Inc. (NYSE:CPNG) and determine whether the smart money was really smart about this stock.

Coupang, Inc. (NYSE:CPNG) investors should pay attention to an increase in enthusiasm from smart money in recent months. Coupang, Inc. (NYSE:CPNG) was in 45 hedge funds’ portfolios at the end of the third quarter of 2021. The all-time high for this statistic was previously 40. This means the bullish number of hedge fund positions in this stock currently sits at its all-time high. There were 33 hedge funds in our database with CPNG holdings at the end of June. Our calculations also showed that CPNG 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. With all of this in mind let’s check out the key hedge fund action regarding Coupang, Inc. (NYSE:CPNG).

Lee Ainslie of Maverick Capital

Do Hedge Funds Think CPNG Is A Good Stock To Buy Now?

At Q3’s end, a total of 45 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 36% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards CPNG over the last 25 quarters. So, let’s examine 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, Neil Mehta’s Greenoaks Capital has the largest position in Coupang, Inc. (NYSE:CPNG), worth close to $5.8313 billion, corresponding to 78.3% of its total 13F portfolio. Sitting at the No. 2 spot is Maverick Capital, led by Lee Ainslie, holding a $2.916 billion position; 29.4% of its 13F portfolio is allocated to the company. Remaining members of the smart money with similar optimism encompass Stanley Druckenmiller’s Duquesne Capital, Christopher Lyle’s SCGE Management and Michael Pausic’s Foxhaven Asset Management. In terms of the portfolio weights assigned to each position Greenoaks Capital allocated the biggest weight to Coupang, Inc. (NYSE:CPNG), around 78.26% of its 13F portfolio. Maverick Capital is also relatively very bullish on the stock, designating 29.41 percent of its 13F equity portfolio to CPNG.

As industrywide interest jumped, some big names have been driving this bullishness. Duquesne Capital, managed by Stanley Druckenmiller, created the biggest position in Coupang, Inc. (NYSE:CPNG). Duquesne Capital had $431.8 million invested in the company at the end of the quarter. David Abrams’s Abrams Capital Management also initiated a $122.9 million position during the quarter. The other funds with brand new CPNG positions are Louis Bacon’s Moore Global Investments, Lei Zhang’s Hillhouse Capital Management, and Shashin Shah’s Think Investments.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Coupang, Inc. (NYSE:CPNG) but similarly valued. These stocks are Wipro Limited (NYSE:WIT), Marriott International Inc (NYSE:MAR), Twitter Inc (NYSE:TWTR), Sumitomo Mitsui Financial Grp, Inc. (NYSE:SMFG), Coinbase Global Inc. (NASDAQ:COIN), Eni SpA (NYSE:E), and Freeport-McMoRan Inc. (NYSE:FCX). This group of stocks’ market caps are closest to CPNG’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 39.7 hedge funds with bullish positions and the average amount invested in these stocks was $2239 million. That figure was $10770 million in CPNG’s case. Twitter Inc (NYSE:TWTR) is the most popular stock in this table. On the other hand Eni SpA (NYSE:E) is the least popular one with only 3 bullish hedge fund positions. Coupang, Inc. (NYSE:CPNG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CPNG is 63.1. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 beat the market again by 3.6 percentage points. Unfortunately, CPNG wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CPNG were disappointed as the stock returned -25.2% since the end of September (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.