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The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded Corporacion America Airports SA (NYSE:CAAP) based on those filings.
Is Corporacion America Airports SA (NYSE:CAAP) a healthy stock for your portfolio? The smart money is getting less optimistic. The number of bullish hedge fund positions retreated by 2 lately. Our calculations also showed that CAAP 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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Israel Englander of Millennium Management[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. 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. Keeping this in mind we're going to take a glance at the fresh hedge fund action surrounding Corporacion America Airports SA (NYSE:CAAP).
How are hedge funds trading Corporacion America Airports SA (NYSE:CAAP)?
At the end of the first quarter, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -20% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards CAAP over the last 18 quarters. With the smart money's capital changing hands, there exists an "upper tier" of noteworthy hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Newtyn Management, managed by Noah Levy and Eugene Dozortsev, holds the number one position in Corporacion America Airports SA (NYSE:CAAP). Newtyn Management has a $3.7 million position in the stock, comprising 1.3% of its 13F portfolio. The second largest stake is held by Marathon Asset Management, led by Bruce J. Richards and Louis Hanover, holding a $1.9 million position; 0.3% of its 13F portfolio is allocated to the stock. Some other hedge funds and institutional investors that hold long positions comprise Michael R. Weisberg's Crestwood Capital Management, Israel Englander's Millennium Management and Robert Charles Gibbins's Autonomy Capital. In terms of the portfolio weights assigned to each position Newtyn Management allocated the biggest weight to Corporacion America Airports SA (NYSE:CAAP), around 1.27% of its 13F portfolio. Crestwood Capital Management is also relatively very bullish on the stock, earmarking 0.65 percent of its 13F equity portfolio to CAAP.
Since Corporacion America Airports SA (NYSE:CAAP) has witnessed declining sentiment from hedge fund managers, we can see that there lies a certain "tier" of money managers who were dropping their positions entirely by the end of the first quarter. It's worth mentioning that Paul Marshall and Ian Wace's Marshall Wace LLP cut the biggest position of the 750 funds tracked by Insider Monkey, valued at about $0.9 million in stock, Renaissance Technologies was right behind this move, as the fund dropped about $0.3 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 2 funds by the end of the first quarter.
Let's check out hedge fund activity in other stocks similar to Corporacion America Airports SA (NYSE:CAAP). We will take a look at Benefytt Technologies, Inc. (NASDAQ:BFYT), Repro Med Systems, Inc. (NASDAQ:KRMD), Shoe Carnival, Inc. (NASDAQ:SCVL), and Tribune Publishing Company (NASDAQ:TPCO). This group of stocks' market caps match CAAP's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BFYT,16,115245,-2 KRMD,10,9334,2 SCVL,11,31637,-5 TPCO,13,102133,0 Average,12.5,64587,-1.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.5 hedge funds with bullish positions and the average amount invested in these stocks was $65 million. That figure was $7 million in CAAP's case. Benefytt Technologies, Inc. (NASDAQ:BFYT) is the most popular stock in this table. On the other hand Repro Med Systems, Inc. (NASDAQ:KRMD) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Corporacion America Airports SA (NYSE:CAAP) is even less popular than KRMD. Hedge funds clearly dropped the ball on CAAP as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. 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 12.2% in 2020 through June 17th and still beat the market by 14.8 percentage points. A small number of hedge funds were also right about betting on CAAP as the stock returned 50.8% so far in the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.