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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 817 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, about a month before the elections. In this article we look at what those investors think of Global Cord Blood Corp (NYSE:CO).
Is CO a good stock to buy now? Global Cord Blood Corp (NYSE:CO) investors should pay attention to a decrease in activity from the world's largest hedge funds recently. Global Cord Blood Corp (NYSE:CO) was in 8 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistics is 13. Our calculations also showed that CO isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Kris Jenner of Rock Springs Capital Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 5 best cheap stocks to buy according to Ray Dalio to identify stocks with upside potential. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now we're going to check out the recent hedge fund action regarding Global Cord Blood Corp (NYSE:CO).
What does smart money think about Global Cord Blood Corp (NYSE:CO)?
At Q3's end, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -27% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CO over the last 21 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies has the most valuable position in Global Cord Blood Corp (NYSE:CO), worth close to $14.2 million, corresponding to less than 0.1%% of its total 13F portfolio. On Renaissance Technologies's heels is Rock Springs Capital Management, led by Kris Jenner, Gordon Bussard, Graham McPhail, holding a $3.2 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors that hold long positions consist of Seth Fischer's Oasis Management, Noam Gottesman's GLG Partners and Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital. In terms of the portfolio weights assigned to each position Oasis Management allocated the biggest weight to Global Cord Blood Corp (NYSE:CO), around 1.14% of its 13F portfolio. Rock Springs Capital Management is also relatively very bullish on the stock, dishing out 0.08 percent of its 13F equity portfolio to CO.
Since Global Cord Blood Corp (NYSE:CO) has experienced declining sentiment from the entirety of the hedge funds we track, it's safe to say that there exists a select few fund managers who were dropping their positions entirely by the end of the third quarter. Interestingly, Israel Englander's Millennium Management cut the largest stake of the "upper crust" of funds watched by Insider Monkey, totaling close to $0.2 million in stock, and John Overdeck and David Siegel's Two Sigma Advisors was right behind this move, as the fund dumped about $0.1 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 3 funds by the end of the third quarter.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Global Cord Blood Corp (NYSE:CO) but similarly valued. These stocks are TherapeuticsMD Inc (NASDAQ:TXMD), Harpoon Therapeutics, Inc. (NASDAQ:HARP), Alphatec Holdings Inc (NASDAQ:ATEC), Star Group L.P. (NYSE:SGU), Tribune Publishing Company (NASDAQ:TPCO), Viad Corp (NYSE:VVI), and UroGen Pharma Ltd. (NASDAQ:URGN). All of these stocks' market caps are similar to CO's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TXMD,11,36272,1 HARP,12,59522,1 ATEC,13,42822,1 SGU,9,81549,-2 TPCO,13,151012,-2 VVI,15,65128,0 URGN,4,26840,-1 Average,11,66164,-0.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $66 million. That figure was $24 million in CO's case. Viad Corp (NYSE:VVI) is the most popular stock in this table. On the other hand UroGen Pharma Ltd. (NASDAQ:URGN) is the least popular one with only 4 bullish hedge fund positions. Global Cord Blood Corp (NYSE:CO) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CO is 38.6. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 31.6% in 2020 through December 2nd and still beat the market by 16 percentage points. A small number of hedge funds were also right about betting on CO as the stock returned 11.3% since the end of the third quarter (through 12/2) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.