Before we spend days researching a stock idea we’d like to take a look at how hedge funds and billionaire investors recently traded that stock. S&P 500 Index returned about 5.2% during the last 12 months ending October 30, 2015. Less than 49% of the stocks in the index outperformed the index. This means you (or a monkey throwing a dart) have less than an even chance of beating the market by randomly picking a stock. On the other hand, the top 30 S&P 500 stocks among hedge funds at the end of September 2014 had an average return of 9.5% during the same period. Sixty three percent of these 30 stocks outperformed the market. Hedge funds had bad stock picks like everyone else. Micron, which lost 50% over this period, was one of hedge funds’ 30 favorite S&P 500 stocks. Anadarko Petroleum was another failed stock pick which lost more than 26%. So, taking cues from hedge funds isn’t a foolproof strategy, but it seems to work on average. In this article, we will take a look at what hedge funds think about Carnival Corporation (NYSE:CCL).
Carnival Corporation (NYSE:CCL) shareholders have witnessed an increase in activity from the world’s largest hedge funds of late. CCL was in 53 hedge funds’ portfolios at the end of September. There were 49 hedge funds in our database with CCL holdings at the end of the previous quarter. At the end of this article we will also compare CCL to other stocks including Itau Unibanco Holding SA (ADR) (NYSE:ITUB), EOG Resources Inc (NYSE:EOG), and Monsanto Company (NYSE:MON) to get a better sense of its popularity.
Follow Carnival Corp (NYSE:CCL)
Follow Carnival Corp (NYSE:CCL)
With all of this in mind, we’re going to take a look at the new action regarding Carnival Corporation (NYSE:CCL).
What have hedge funds been doing with Carnival Corporation (NYSE:CCL)?
Heading into Q4, a total of 53 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 8% from the second quarter. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Platinum Asset Management, managed by Kerr Neilson, holds the biggest position in Carnival Corporation (NYSE:CCL). Platinum Asset Management has a $369 million position in the stock, comprising 10% of its 13F portfolio. Coming in second is Cliff Asness of AQR Capital Management, with a $206.4 million position; 0.4% of its 13F portfolio is allocated to the company. Remaining members of the smart money that hold long positions encompass Ken Griffin’s Citadel Investment Group, William B. Gray’s Orbis Investment Management and D E Shaw.
As aggregate interest increased, specific money managers have jumped into Carnival Corporation (NYSE:CCL) headfirst. Aristeia Capital, managed by Robert Henry Lynch, initiated the most valuable position in Carnival Corporation (NYSE:CCL). Aristeia Capital had $53.6 million invested in the company at the end of the quarter. Stanley Druckenmiller’s Duquesne Capital also made a $19.3 million investment in the stock during the quarter. The following funds were also among the new CCL investors: Ken Heebner’s Capital Growth Management, Joel Greenblatt’s Gotham Asset Management, and Matthew Tewksbury’s Stevens Capital Management.
Let’s also examine hedge fund activity in other stocks similar to Carnival Corporation (NYSE:CCL). We will take a look at Itau Unibanco Holding SA (ADR) (NYSE:ITUB), EOG Resources Inc (NYSE:EOG), Monsanto Company (NYSE:MON), and Kimberly Clark Corp (NYSE:KMB). This group of stocks’ market caps are closest to CCL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ITUB | 18 | 264160 | -5 |
| EOG | 60 | 1539301 | 3 |
| MON | 60 | 3048446 | -4 |
| KMB | 34 | 1189525 | 3 |
As you can see these stocks had an average of 43 hedge funds with bullish positions and the average amount invested in these stocks was $1,510 million. That figure was $2,125 million in CCL’s case. EOG Resources Inc (NYSE:EOG) is the most popular stock in this table. On the other hand Itau Unibanco Holding SA (ADR) (NYSE:ITUB) is the least popular one with only 18 bullish hedge fund positions. Carnival Corporation (NYSE:CCL) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard EOG might be a better candidate to consider a long position.
