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. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Charles River Laboratories International Inc. (NYSE:CRL).
Charles River Laboratories International Inc. (NYSE:CRL) was in 36 hedge funds' portfolios at the end of March. CRL investors should pay attention to an increase in hedge fund interest lately. There were 32 hedge funds in our database with CRL holdings at the end of the previous quarter. Our calculations also showed that CRL 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 51 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_262340" align="aligncenter" width="399"] Arthur B Cohen and Joseph Healey of Healthcor Management LP[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020's unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let's take a glance at the recent hedge fund action surrounding Charles River Laboratories International Inc. (NYSE:CRL).
Hedge fund activity in Charles River Laboratories International Inc. (NYSE:CRL)
At Q1's end, a total of 36 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CRL over the last 18 quarters. With hedge funds' positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
More specifically, AQR Capital Management was the largest shareholder of Charles River Laboratories International Inc. (NYSE:CRL), with a stake worth $171.1 million reported as of the end of September. Trailing AQR Capital Management was Renaissance Technologies, which amassed a stake valued at $168.8 million. Ariel Investments, Healthcor Management LP, and Iridian Asset Management 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 Kerrisdale Capital allocated the biggest weight to Charles River Laboratories International Inc. (NYSE:CRL), around 6.01% of its 13F portfolio. Iron Triangle Partners is also relatively very bullish on the stock, dishing out 4.88 percent of its 13F equity portfolio to CRL.
As industrywide interest jumped, key money managers were leading the bulls' herd. Sandler Capital Management, managed by Andrew Sandler, established the most outsized position in Charles River Laboratories International Inc. (NYSE:CRL). Sandler Capital Management had $22.9 million invested in the company at the end of the quarter. Kevin Molloy's Iron Triangle Partners also initiated a $12.6 million position during the quarter. The other funds with brand new CRL positions are Murray Stahl's Horizon Asset Management, Krishen Sud's Sivik Global Healthcare, and David Harding's Winton Capital Management.
Let's now take a look at hedge fund activity in other stocks similar to Charles River Laboratories International Inc. (NYSE:CRL). These stocks are Hubbell Incorporated (NYSE:HUBB), Assurant, Inc. (NYSE:AIZ), Alteryx, Inc. (NYSE:AYX), and Universal Display Corporation (NASDAQ:OLED). This group of stocks' market caps match CRL's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position HUBB,15,272338,-8 AIZ,33,782609,8 AYX,43,1019690,-1 OLED,24,222953,-7 Average,28.75,574398,-2 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.75 hedge funds with bullish positions and the average amount invested in these stocks was $574 million. That figure was $863 million in CRL's case. Alteryx, Inc. (NYSE:AYX) is the most popular stock in this table. On the other hand Hubbell Incorporated (NYSE:HUBB) is the least popular one with only 15 bullish hedge fund positions. Charles River Laboratories International Inc. (NYSE:CRL) is not the most popular stock in this group but hedge fund interest is still above average. 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 8.3% in 2020 through the end of May but still beat the market by 13.2 percentage points. Hedge funds were also right about betting on CRL as the stock returned 42.4% in Q2 (through the end of May) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.