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 third 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 4 years and analyze what the smart money thinks of Coca-Cola European Partners plc (NYSE:CCEP) based on that data.
Coca-Cola European Partners plc (NYSE:CCEP) has seen an increase in activity from the world's largest hedge funds of late. Our calculations also showed that CCEP isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to 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 Russell 2000 ETFs by 40 percentage points since May 2014 (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.
[caption id="attachment_365194" align="alignnone" width="600"] David E. Shaw of D.E. Shaw[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world's largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds' buy/sell signals. We're going to analyze the key hedge fund action encompassing Coca-Cola European Partners plc (NYSE:CCEP).
How have hedgies been trading Coca-Cola European Partners plc (NYSE:CCEP)?
At the end of the third quarter, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 60% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CCEP over the last 17 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Coca-Cola European Partners plc (NYSE:CCEP) was held by D E Shaw, which reported holding $42.7 million worth of stock at the end of September. It was followed by GLG Partners with a $17.7 million position. Other investors bullish on the company included Two Sigma Advisors, Millennium Management, and Echo Street Capital Management. In terms of the portfolio weights assigned to each position Algert Coldiron Investors allocated the biggest weight to Coca-Cola European Partners plc (NYSE:CCEP), around 0.85% of its 13F portfolio. Echo Street Capital Management is also relatively very bullish on the stock, earmarking 0.23 percent of its 13F equity portfolio to CCEP.
As industrywide interest jumped, key money managers have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, established the biggest position in Coca-Cola European Partners plc (NYSE:CCEP). Citadel Investment Group had $6.4 million invested in the company at the end of the quarter. Peter Algert and Kevin Coldiron's Algert Coldiron Investors also made a $2.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Mike Vranos's Ellington, Matthew Tewksbury's Stevens Capital Management, and Louis Navellier's Navellier & Associates.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Coca-Cola European Partners plc (NYSE:CCEP) but similarly valued. These stocks are TD Ameritrade Holding Corp. (NYSE:AMTD), Fiat Chrysler Automobiles NV (NYSE:FCAU), KLA-Tencor Corporation (NASDAQ:KLAC), and McKesson Corporation (NYSE:MCK). This group of stocks' market caps resemble CCEP's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AMTD,29,334275,7 FCAU,27,1493339,-1 KLAC,28,784370,4 MCK,39,1982389,3 Average,30.75,1148593,3.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.75 hedge funds with bullish positions and the average amount invested in these stocks was $1149 million. That figure was $126 million in CCEP's case. McKesson Corporation (NYSE:MCK) is the most popular stock in this table. On the other hand Fiat Chrysler Automobiles NV (NYSE:FCAU) is the least popular one with only 27 bullish hedge fund positions. Compared to these stocks Coca-Cola European Partners plc (NYSE:CCEP) is even less popular than FCAU. Hedge funds dodged a bullet by taking a bearish stance towards CCEP. Our calculations showed that the top 20 most popular hedge fund stocks returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately CCEP wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); CCEP investors were disappointed as the stock returned -7.8% during the fourth quarter (through the end of November) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market so far in Q4.
Disclosure: None. This article was originally published at Insider Monkey.