Hedge Funds Are Buying Camping World Holdings, Inc. (CWH)
In this article you are going to find out whether hedge funds think Camping World Holdings, Inc. (NYSE:CWH) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It's not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Is Camping World Holdings, Inc. (NYSE:CWH) undervalued? The best stock pickers are taking an optimistic view. The number of bullish hedge fund bets improved by 1 in recent months. Our calculations also showed that CWH 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.
In the eyes of most shareholders, hedge funds are perceived as unimportant, outdated investment tools of years past. While there are over 8000 funds with their doors open at present, We look at the crème de la crème of this club, around 850 funds. These money managers manage bulk of the smart money's total asset base, and by shadowing their unrivaled picks, Insider Monkey has discovered a few investment strategies that have historically outperformed the S&P 500 index. Insider Monkey's flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
[caption id="attachment_193003" align="aligncenter" width="400"]
Chuck Royce of Royce & Associates[/caption]
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, blockchain technology's influence will go beyond online payments. So, we are checking out this futurist's moonshot opportunities in tech stocks. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Now let's take a gander at the new hedge fund action surrounding Camping World Holdings, Inc. (NYSE:CWH).
How have hedgies been trading Camping World Holdings, Inc. (NYSE:CWH)?
Heading into the second quarter of 2020, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 7% from one quarter earlier. By comparison, 10 hedge funds held shares or bullish call options in CWH a year ago. With hedge funds' positions undergoing their usual ebb and flow, there exists an "upper tier" of key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
More specifically, Abrams Capital Management was the largest shareholder of Camping World Holdings, Inc. (NYSE:CWH), with a stake worth $34.8 million reported as of the end of September. Trailing Abrams Capital Management was Newtyn Management, which amassed a stake valued at $9.2 million. D E Shaw, Millennium Management, and Royce & Associates 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 Newtyn Management allocated the biggest weight to Camping World Holdings, Inc. (NYSE:CWH), around 3.16% of its 13F portfolio. Abrams Capital Management is also relatively very bullish on the stock, earmarking 1.37 percent of its 13F equity portfolio to CWH.
Now, key hedge funds were leading the bulls' herd. Balyasny Asset Management, managed by Dmitry Balyasny, established the most outsized position in Camping World Holdings, Inc. (NYSE:CWH). Balyasny Asset Management had $1.7 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital also initiated a $1.2 million position during the quarter. The other funds with new positions in the stock are Cristan Blackman's Empirical Capital Partners, Ryan Tolkin (CIO)'s Schonfeld Strategic Advisors, and Donald Sussman's Paloma Partners.
Let's go over hedge fund activity in other stocks similar to Camping World Holdings, Inc. (NYSE:CWH). We will take a look at Live Oak Bancshares Inc (NASDAQ:LOB), Goldman Sachs BDC, Inc. (NYSE:GSBD), Forestar Group Inc. (NYSE:FOR), and AC Immune SA (NASDAQ:ACIU). This group of stocks' market caps are similar to CWH's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LOB,10,25016,0 GSBD,1,1946,-1 FOR,7,52227,-5 ACIU,11,97191,1 Average,7.25,44095,-1.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.25 hedge funds with bullish positions and the average amount invested in these stocks was $44 million. That figure was $68 million in CWH's case. AC Immune SA (NASDAQ:ACIU) is the most popular stock in this table. On the other hand Goldman Sachs BDC, Inc. (NYSE:GSBD) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Camping World Holdings, Inc. (NYSE:CWH) is more popular among hedge funds. 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 returned 13.3% in 2020 through June 25th but still managed to beat the market by 16.8 percentage points. Hedge funds were also right about betting on CWH as the stock returned 357.8% so far in Q2 (through June 25th) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
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