Where Do Hedge Funds Stand On Carvana Co. (CVNA)?

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31st. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Carvana Co. (NYSE:CVNA).

Is Carvana Co. (NYSE:CVNA) an exceptional investment now? Investors who are in the know were in an optimistic mood. The number of bullish hedge fund positions increased by 1 recently. Carvana Co. (NYSE:CVNA) was in 64 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic was previously 63. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that CVNA isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 63 hedge funds in our database with CVNA positions at the end of the fourth quarter.

In the eyes of most investors, hedge funds are perceived as slow, outdated financial vehicles of yesteryear. While there are greater than 8000 funds trading today, Our researchers look at the masters of this club, approximately 850 funds. These investment experts orchestrate most of the hedge fund industry’s total asset base, and by observing their unrivaled equity investments, Insider Monkey has unearthed numerous investment strategies that have historically outperformed Mr. Market. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Chase Coleman of Tiger Global

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

Heading into the second quarter of 2021, a total of 64 of the hedge funds tracked by Insider Monkey were long this stock, a change of 2% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in CVNA over the last 23 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).

The largest stake in Carvana Co. (NYSE:CVNA) was held by Tiger Global Management LLC, which reported holding $1577.8 million worth of stock at the end of December. It was followed by Spruce House Investment Management with a $1040 million position. Other investors bullish on the company included CAS Investment Partners, Lone Pine Capital, and D1 Capital Partners. In terms of the portfolio weights assigned to each position CAS Investment Partners allocated the biggest weight to Carvana Co. (NYSE:CVNA), around 44.31% of its 13F portfolio. Antipodean Advisors is also relatively very bullish on the stock, designating 32.85 percent of its 13F equity portfolio to CVNA.

As aggregate interest increased, specific money managers have jumped into Carvana Co. (NYSE:CVNA) headfirst. Third Point, managed by Dan Loeb, assembled the biggest position in Carvana Co. (NYSE:CVNA). Third Point had $105 million invested in the company at the end of the quarter. Daniel S. Och’s OZ Management also made a $99.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Scott Ferguson’s Sachem Head Capital, Edmond M. Safra’s EMS Capital, and Robert Boucai’s Newbrook Capital Advisors.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Carvana Co. (NYSE:CVNA) but similarly valued. We will take a look at America Movil SAB de CV (NYSE:AMX), TC Energy Corporation (NYSE:TRP), Barclays PLC (NYSE:BCS), Eni SpA (NYSE:E), Banco Bradesco SA (NYSE:BBD), Ambev SA (NYSE:ABEV), and Canadian Imperial Bank of Commerce (NYSE:CM). This group of stocks’ market caps match CVNA’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $214 million. That figure was $7536 million in CVNA’s case. TC Energy Corporation (NYSE:TRP) is the most popular stock in this table. On the other hand Eni SpA (NYSE:E) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Carvana Co. (NYSE:CVNA) is more popular among hedge funds. Our overall hedge fund sentiment score for CVNA is 86. 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 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. Unfortunately CVNA wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CVNA were disappointed as the stock returned 4.7% since the end of the first quarter (through 6/11) 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 most of these stocks already outperformed the market since 2019.

Disclosure: None. This article was originally published at Insider Monkey.