Hedge Funds Aren’t Done Buying Copart, Inc. (CPRT)
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. What do these smart investors think about Copart, Inc. (NASDAQ:CPRT)?
Copart, Inc. (NASDAQ:CPRT) was in 48 hedge funds' portfolios at the end of the first quarter of 2020. CPRT has seen an increase in hedge fund sentiment of late. There were 46 hedge funds in our database with CPRT holdings at the end of the previous quarter. Our calculations also showed that CPRT 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 44 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'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_670980" align="aligncenter" width="399"]
Gabriel Plotkin of Melvin Capital Management[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we are still not out of the woods in terms of the coronavirus pandemic. So, we checked out this successful trader’s “corona catalyst plays“. 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. Now we're going to analyze the key hedge fund action regarding Copart, Inc. (NASDAQ:CPRT).
How are hedge funds trading Copart, Inc. (NASDAQ:CPRT)?
Heading into the second quarter of 2020, a total of 48 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from the fourth quarter of 2019. On the other hand, there were a total of 24 hedge funds with a bullish position in CPRT a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Melvin Capital Management held the most valuable stake in Copart, Inc. (NASDAQ:CPRT), which was worth $324.2 million at the end of the third quarter. On the second spot was Gobi Capital which amassed $55.5 million worth of shares. Echo Street Capital Management, Nitorum Capital, and Candlestick Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Gobi Capital allocated the biggest weight to Copart, Inc. (NASDAQ:CPRT), around 7.67% of its 13F portfolio. Bayberry Capital Partners is also relatively very bullish on the stock, dishing out 6.17 percent of its 13F equity portfolio to CPRT.
As industrywide interest jumped, some big names have been driving this bullishness. Gobi Capital, managed by Bo Shan, established the most valuable position in Copart, Inc. (NASDAQ:CPRT). Gobi Capital had $55.5 million invested in the company at the end of the quarter. Jack Woodruff's Candlestick Capital Management also made a $32.5 million investment in the stock during the quarter. The other funds with brand new CPRT positions are Richard Merage's MIG Capital, Lee Hicks and Jan Koerner's Park Presidio Capital, and Angela Aldrich's Bayberry Capital Partners.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Copart, Inc. (NASDAQ:CPRT) but similarly valued. These stocks are FleetCor Technologies, Inc. (NYSE:FLT), Incyte Corporation (NASDAQ:INCY), Northern Trust Corporation (NASDAQ:NTRS), and Church & Dwight Co., Inc. (NYSE:CHD). All of these stocks' market caps are similar to CPRT's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position FLT,51,1655053,7 INCY,40,3325488,-6 NTRS,27,330348,-8 CHD,36,506943,-1 Average,38.5,1454458,-2 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 38.5 hedge funds with bullish positions and the average amount invested in these stocks was $1454 million. That figure was $733 million in CPRT's case. FleetCor Technologies, Inc. (NYSE:FLT) is the most popular stock in this table. On the other hand Northern Trust Corporation (NASDAQ:NTRS) is the least popular one with only 27 bullish hedge fund positions. Copart, Inc. (NASDAQ:CPRT) is not the most popular stock in this group but hedge fund interest is still above average. 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 7.9% in 2020 through May 22nd but still beat the market by 15.6 percentage points. Hedge funds were also right about betting on CPRT as the stock returned 25.9% in Q2 (through May 22nd) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
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