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Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the fourth quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of SciPlay Corporation (NASDAQ:SCPL) based on that data.
Is SciPlay Corporation (NASDAQ:SCPL) going to take off soon? Money managers were taking a bearish view. The number of long hedge fund positions were trimmed by 2 in recent months. SciPlay Corporation (NASDAQ:SCPL) was in 23 hedge funds' portfolios at the end of March. The all time high for this statistic is 27. Our calculations also showed that SCPL isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 25 hedge funds in our database with SCPL holdings at the end of December.
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 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Louis Bacon Moore of Moore Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery 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. 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 homepage. Keeping this in mind we're going to take a look at the latest hedge fund action regarding SciPlay Corporation (NASDAQ:SCPL).
Do Hedge Funds Think SCPL Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -8% from the fourth quarter of 2020. On the other hand, there were a total of 17 hedge funds with a bullish position in SCPL a year ago. 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 publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Hein Park Capital, managed by Courtney Carson, holds the number one position in SciPlay Corporation (NASDAQ:SCPL). Hein Park Capital has a $26.1 million position in the stock, comprising 3.8% of its 13F portfolio. On Hein Park Capital's heels is Renaissance Technologies, holding a $19.1 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining peers that hold long positions consist of Himanshu Gulati's Antara Capital, Israel Englander's Millennium Management and John Overdeck and David Siegel's Two Sigma Advisors. In terms of the portfolio weights assigned to each position Hein Park Capital allocated the biggest weight to SciPlay Corporation (NASDAQ:SCPL), around 3.81% of its 13F portfolio. AREX Capital Management is also relatively very bullish on the stock, earmarking 3.57 percent of its 13F equity portfolio to SCPL.
Since SciPlay Corporation (NASDAQ:SCPL) has witnessed declining sentiment from the aggregate hedge fund industry, we can see that there was a specific group of fund managers that elected to cut their positions entirely heading into Q2. At the top of the heap, Ken Grossman and Glen Schneider's SG Capital Management dropped the biggest investment of the "upper crust" of funds watched by Insider Monkey, comprising an estimated $8.2 million in stock, and Wilmot B. Harkey and Daniel Mack's Nantahala Capital Management was right behind this move, as the fund cut about $7.1 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 2 funds heading into Q2.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as SciPlay Corporation (NASDAQ:SCPL) but similarly valued. These stocks are Future FinTech Group Inc. (NASDAQ:FTFT), The9 Limited (NASDAQ:NCTY), Itamar Medical Ltd. (NASDAQ:ITMR), Bioceres Crop Solutions Corp. (NASDAQ:BIOX), Carter Bankshares, Inc. (NASDAQ:CARE), Global Water Resources, Inc. (NASDAQ:GWRS), and Cadiz Inc (NASDAQ:CDZI). This group of stocks' market values are closest to SCPL's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position FTFT,2,1161,-1 NCTY,5,8855,4 ITMR,13,90249,5 BIOX,4,750,3 CARE,11,11892,-1 GWRS,2,6403,-1 CDZI,9,5235,2 Average,6.6,17792,1.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.6 hedge funds with bullish positions and the average amount invested in these stocks was $18 million. That figure was $96 million in SCPL's case. Itamar Medical Ltd. (NASDAQ:ITMR) is the most popular stock in this table. On the other hand Future FinTech Group Inc. (NASDAQ:FTFT) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks SciPlay Corporation (NASDAQ:SCPL) is more popular among hedge funds. Our overall hedge fund sentiment score for SCPL is 78.6. 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 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 23.8% in 2021 through July 16th and still beat the market by 7.7 percentage points. Unfortunately SCPL wasn't nearly as popular as these 5 stocks and hedge funds that were betting on SCPL were disappointed as the stock returned 4.4% since the end of the first quarter (through 7/16) 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.
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Disclosure: None. This article was originally published at Insider Monkey.