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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. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Americold Realty Trust (NYSE:COLD).
Americold Realty Trust (NYSE:COLD) investors should pay attention to a decrease in hedge fund interest in recent months. Our calculations also showed that COLD isn't among the 30 most popular stocks among hedge funds (click for Q1 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.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
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Anna Nikolayevsky of Axel Capital[/caption]
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we're going to go over the fresh hedge fund action encompassing Americold Realty Trust (NYSE:COLD).
How have hedgies been trading Americold Realty Trust (NYSE:COLD)?
At Q1's end, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -4% from the previous quarter. On the other hand, there were a total of 27 hedge funds with a bullish position in COLD a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists an "upper tier" of notable hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, D. E. Shaw's D E Shaw has the largest position in Americold Realty Trust (NYSE:COLD), worth close to $108 million, comprising 0.2% of its total 13F portfolio. Sitting at the No. 2 spot is V3 Capital, managed by Charles Fitzgerald, which holds a $40.4 million position; the fund has 8.8% of its 13F portfolio invested in the stock. Remaining peers with similar optimism consist of Israel Englander's Millennium Management, Eduardo Abush's Waterfront Capital Partners and Jonathan Soros's JS Capital. In terms of the portfolio weights assigned to each position V3 Capital allocated the biggest weight to Americold Realty Trust (NYSE:COLD), around 8.84% of its 13F portfolio. SkyTop Capital Management is also relatively very bullish on the stock, setting aside 6.46 percent of its 13F equity portfolio to COLD.
Because Americold Realty Trust (NYSE:COLD) has faced a decline in interest from the smart money, it's safe to say that there exists a select few funds that decided to sell off their full holdings last quarter. Interestingly, Dmitry Balyasny's Balyasny Asset Management sold off the largest investment of the 750 funds followed by Insider Monkey, totaling about $30.7 million in stock, and Louis Bacon's Moore Global Investments was right behind this move, as the fund cut about $20.1 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 1 funds last quarter.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Americold Realty Trust (NYSE:COLD) but similarly valued. These stocks are Mobile TeleSystems Public Joint Stock Company (NYSE:MBT), Mellanox Technologies, Ltd. (NASDAQ:MLNX), Kilroy Realty Corp (NYSE:KRC), and Hill-Rom Holdings, Inc. (NYSE:HRC). This group of stocks' market caps resemble COLD's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MBT,9,377645,-4 MLNX,44,1873688,5 KRC,20,180763,2 HRC,30,738463,3 Average,25.75,792640,1.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.75 hedge funds with bullish positions and the average amount invested in these stocks was $793 million. That figure was $276 million in COLD's case. Mellanox Technologies, Ltd. (NASDAQ:MLNX) is the most popular stock in this table. On the other hand Mobile TeleSystems Public Joint Stock Company (NYSE:MBT) is the least popular one with only 9 bullish hedge fund positions. Americold Realty Trust (NYSE:COLD) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th and surpassed the market by 14.2 percentage points. Unfortunately COLD wasn't nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); COLD investors were disappointed as the stock returned 3.2% during the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.