Hedge Funds Are Souring On Sealed Air Corporation (SEE)
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 866 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 Sealed Air Corporation (NYSE:SEE).
Is Sealed Air Corporation (NYSE:SEE) ready to rally soon? Investors who are in the know were in a pessimistic mood. The number of bullish hedge fund positions went down by 5 recently. Sealed Air Corporation (NYSE:SEE) was in 27 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 49. Our calculations also showed that SEE isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
To the average investor there are a multitude of gauges investors put to use to value their holdings. A pair of the most innovative gauges are hedge fund and insider trading interest. We have shown that, historically, those who follow the top picks of the elite investment managers can trounce the S&P 500 by a significant amount (see the details here). Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
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Do Hedge Funds Think SEE Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 27 of the hedge funds tracked by Insider Monkey were long this stock, a change of -16% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards SEE over the last 23 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Rivulet Capital was the largest shareholder of Sealed Air Corporation (NYSE:SEE), with a stake worth $288.2 million reported as of the end of March. Trailing Rivulet Capital was Kensico Capital, which amassed a stake valued at $203.6 million. Nitorum Capital, Marshall Wace LLP, and Impax 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 Rivulet Capital allocated the biggest weight to Sealed Air Corporation (NYSE:SEE), around 15.63% of its 13F portfolio. Kensico Capital is also relatively very bullish on the stock, earmarking 6.58 percent of its 13F equity portfolio to SEE.
Because Sealed Air Corporation (NYSE:SEE) has witnessed a decline in interest from the aggregate hedge fund industry, logic holds that there exists a select few money managers that elected to cut their full holdings by the end of the first quarter. Intriguingly, Ricky Sandler's Eminence Capital dropped the biggest investment of the 750 funds monitored by Insider Monkey, totaling an estimated $32.3 million in stock, and Lee Ainslie's Maverick Capital was right behind this move, as the fund dumped about $1.4 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 5 funds by the end of the first quarter.
Let's also examine hedge fund activity in other stocks similar to Sealed Air Corporation (NYSE:SEE). These stocks are TCF Financial Corporation (NYSE:TCF), Starwood Property Trust, Inc. (NYSE:STWD), Royal Gold, Inc (NASDAQ:RGLD), Sotera Health Company (NASDAQ:SHC), Exelixis, Inc. (NASDAQ:EXEL), United States Steel Corporation (NYSE:X), and Vertiv Holdings Co (NYSE:VRT). This group of stocks' market valuations resemble SEE's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TCF,13,398544,-1 STWD,10,176663,-3 RGLD,17,237026,-9 SHC,36,609684,9 EXEL,27,992164,3 X,22,635515,-15 VRT,39,997190,-11 Average,23.4,578112,-3.9 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.4 hedge funds with bullish positions and the average amount invested in these stocks was $578 million. That figure was $765 million in SEE's case. Vertiv Holdings Co (NYSE:VRT) is the most popular stock in this table. On the other hand Starwood Property Trust, Inc. (NYSE:STWD) is the least popular one with only 10 bullish hedge fund positions. Sealed Air Corporation (NYSE:SEE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SEE is 45.8. 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 24% in 2021 through July 9th and still beat the market by 6.7 percentage points. Hedge funds were also right about betting on SEE as the stock returned 27.9% since the end of Q1 (through 7/9) 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.
