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. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of March 31st, a week after the market trough. We are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article we look at how hedge funds traded Global Cord Blood Corp (NYSE:CO) and determine whether the smart money was really smart about this stock.
Global Cord Blood Corp (NYSE:CO) investors should pay attention to an increase in hedge fund sentiment in recent months. Our calculations also showed that CO 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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 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'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_364887" align="aligncenter" width="395"] Kris Jenner of Rock Springs Capital Management[/caption]
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, we take a look at lists like the 9 states that banned plastic bags to identify emerging trends that are likely to lead to 1000% gains in the coming years. 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 we're going to take a gander at the latest hedge fund action encompassing Global Cord Blood Corp (NYSE:CO).
What does smart money think about Global Cord Blood Corp (NYSE:CO)?
Heading into the second quarter of 2020, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 8% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CO over the last 18 quarters. With hedgies' capital changing hands, there exists a select group of notable hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, holds the number one position in Global Cord Blood Corp (NYSE:CO). Renaissance Technologies has a $10.3 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Renaissance Technologies's heels is Kris Jenner, Gordon Bussard, Graham McPhail of Rock Springs Capital Management, with a $2.9 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors with similar optimism consist of Seth Fischer's Oasis Management, Noam Gottesman's GLG Partners and Matthew Hulsizer's PEAK6 Capital Management. In terms of the portfolio weights assigned to each position Oasis Management allocated the biggest weight to Global Cord Blood Corp (NYSE:CO), around 1.95% of its 13F portfolio. Rock Springs Capital Management is also relatively very bullish on the stock, dishing out 0.12 percent of its 13F equity portfolio to CO.
Consequently, some big names were breaking ground themselves. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, initiated the most valuable position in Global Cord Blood Corp (NYSE:CO). Arrowstreet Capital had $0.1 million invested in the company at the end of the quarter. Michael Gelband's ExodusPoint Capital also made a $0 million investment in the stock during the quarter.
Let's also examine hedge fund activity in other stocks similar to Global Cord Blood Corp (NYSE:CO). These stocks are MagnaChip Semiconductor Corporation (NYSE:MX), PDF Solutions, Inc. (NASDAQ:PDFS), Myers Industries, Inc. (NYSE:MYE), and Wabash National Corporation (NYSE:WNC). All of these stocks' market caps are closest to CO's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MX,22,153806,-5 PDFS,12,19073,0 MYE,13,71362,0 WNC,16,27269,4 Average,15.75,67878,-0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.75 hedge funds with bullish positions and the average amount invested in these stocks was $68 million. That figure was $18 million in CO's case. MagnaChip Semiconductor Corporation (NYSE:MX) is the most popular stock in this table. On the other hand PDF Solutions, Inc. (NASDAQ:PDFS) is the least popular one with only 12 bullish hedge fund positions. Global Cord Blood Corp (NYSE:CO) 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 13.3% in 2020 through June 25th and surpassed the market by 16.8 percentage points. Unfortunately CO wasn't nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); CO investors were disappointed as the stock returned -2.2% 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.