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Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that's why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to the smartest analysts and expensive data/information sources that individual investors can't match. So should one consider investing in Carlyle Group Inc (NASDAQ:CG)? The smart money sentiment can provide an answer to this question.
Is Carlyle Group Inc (NASDAQ:CG) a buy, sell, or hold? Investors who are in the know were buying. The number of long hedge fund bets went up by 13 recently. Carlyle Group Inc (NASDAQ:CG) was in 34 hedge funds' portfolios at the end of September. The all time high for this statistic was previously 26. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that CG isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Robert Pohly of Samlyn Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now we're going to go over the new hedge fund action regarding Carlyle Group Inc (NASDAQ:CG).
Do Hedge Funds Think CG Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 34 of the hedge funds tracked by Insider Monkey were long this stock, a change of 62% from the second quarter of 2021. On the other hand, there were a total of 14 hedge funds with a bullish position in CG a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Alkeon Capital Management, managed by Panayotis Takis Sparaggis, holds the biggest position in Carlyle Group Inc (NASDAQ:CG). Alkeon Capital Management has a $363.3 million position in the stock, comprising 0.6% of its 13F portfolio. The second most bullish fund manager is Robert Pohly of Samlyn Capital, with a $229.2 million position; 3.1% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors that hold long positions contain Israel Englander's Millennium Management, Paul Marshall and Ian Wace's Marshall Wace LLP and Ken Griffin's Citadel Investment Group. In terms of the portfolio weights assigned to each position Strycker View Capital allocated the biggest weight to Carlyle Group Inc (NASDAQ:CG), around 4.1% of its 13F portfolio. Samlyn Capital is also relatively very bullish on the stock, setting aside 3.07 percent of its 13F equity portfolio to CG.
As aggregate interest increased, key hedge funds have been driving this bullishness. Balyasny Asset Management, managed by Dmitry Balyasny, created the largest position in Carlyle Group Inc (NASDAQ:CG). Balyasny Asset Management had $58.8 million invested in the company at the end of the quarter. Steve Cohen's Point72 Asset Management also made a $41.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Sander Gerber's Hudson Bay Capital Management, Allon Hellmann's Full18 Capital, and Usman Waheed's Strycker View Capital.
Let's now review hedge fund activity in other stocks similar to Carlyle Group Inc (NASDAQ:CG). These stocks are Ceridian HCM Holding Inc. (NYSE:CDAY), Celanese Corporation (NYSE:CE), Bath & Body Works Inc. (NYSE:BBWI), Full Truck Alliance Co. Ltd. (NYSE:YMM), Brookfield Infrastructure Partners L.P. (NYSE:BIP), Liberty Global plc (NASDAQ:LBTYA), and Signature Bank (NASDAQ:SBNY). All of these stocks' market caps are similar to CG's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CDAY,20,1798355,-5 CE,26,735190,-11 BBWI,56,6556642,3 YMM,13,263866,13 BIP,15,104470,-1 LBTYA,34,791291,4 SBNY,46,950619,3 Average,30,1600062,0.9 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 30 hedge funds with bullish positions and the average amount invested in these stocks was $1600 million. That figure was $1402 million in CG's case. Bath & Body Works Inc. (NYSE:BBWI) is the most popular stock in this table. On the other hand Full Truck Alliance Co. Ltd. (NYSE:YMM) is the least popular one with only 13 bullish hedge fund positions. Carlyle Group Inc (NASDAQ:CG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CG is 64.4. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Hedge funds were also right about betting on CG as the stock returned 16.2% since the end of Q3 (through 11/30) 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.