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At Insider Monkey, we pore over the filings of nearly 817 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we've gathered as a result gives us access to a wealth of collective knowledge based on these firms' portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not Coca-Cola Consolidated Inc. (NASDAQ:COKE) makes for a good investment right now.
Coca-Cola Consolidated Inc. (NASDAQ:COKE) shareholders have witnessed a decrease in hedge fund sentiment recently. Coca-Cola Consolidated Inc. (NASDAQ:COKE) was in 12 hedge funds' portfolios at the end of September. The all time high for this statistics is 14. Our calculations also showed that COKE isn't among the 30 most popular stocks among hedge funds (click for Q3 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.
Today there are plenty of metrics market participants use to size up stocks. A duo of the best metrics are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the elite hedge fund managers can outpace their index-focused peers by a superb margin (see the details here).
Noam Gottesman of GLG Partners
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind we're going to take a glance at the latest hedge fund action encompassing Coca-Cola Consolidated Inc. (NASDAQ:COKE).
Do Hedge Funds Think COKE Is A Good Stock To Buy Now?
At third quarter's end, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -8% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards COKE over the last 21 quarters. With hedge funds' capital changing hands, there exists an "upper tier" of notable hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, GLG Partners, managed by Noam Gottesman, holds the most valuable position in Coca-Cola Consolidated Inc. (NASDAQ:COKE). GLG Partners has a $10.7 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holding a $4.7 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors with similar optimism consist of Renaissance Technologies, David Harding's Winton Capital Management and Cliff Asness's AQR Capital Management. In terms of the portfolio weights assigned to each position Winton Capital Management allocated the biggest weight to Coca-Cola Consolidated Inc. (NASDAQ:COKE), around 0.09% of its 13F portfolio. PDT Partners is also relatively very bullish on the stock, setting aside 0.06 percent of its 13F equity portfolio to COKE.
Due to the fact that Coca-Cola Consolidated Inc. (NASDAQ:COKE) has witnessed a decline in interest from the entirety of the hedge funds we track, we can see that there were a few fund managers that elected to cut their positions entirely in the third quarter. It's worth mentioning that Dmitry Balyasny's Balyasny Asset Management said goodbye to the largest stake of all the hedgies followed by Insider Monkey, comprising close to $0.2 million in stock, and Gavin Saitowitz and Cisco J. del Valle's Springbok Capital was right behind this move, as the fund dumped about $0 million worth. These moves are important to note, as total hedge fund interest fell by 1 funds in the third quarter.
Let's also examine hedge fund activity in other stocks similar to Coca-Cola Consolidated Inc. (NASDAQ:COKE). We will take a look at Aimmune Therapeutics Inc (NASDAQ:AIMT), ExlService Holdings, Inc. (NASDAQ:EXLS), CVB Financial Corp. (NASDAQ:CVBF), Vishay Intertechnology (NYSE:VSH), CONMED Corporation (NYSE:CNMD), Arco Platform Limited (NASDAQ:ARCE), and Strategic Education Inc (NASDAQ:STRA). This group of stocks' market valuations are closest to COKE's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AIMT,32,440174,12 EXLS,18,57117,6 CVBF,13,34209,-1 VSH,27,333332,-1 CNMD,33,286962,2 ARCE,14,143267,-11 STRA,23,140362,2 Average,22.9,205060,1.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.9 hedge funds with bullish positions and the average amount invested in these stocks was $205 million. That figure was $31 million in COKE's case. CONMED Corporation (NYSE:CNMD) is the most popular stock in this table. On the other hand CVB Financial Corp. (NASDAQ:CVBF) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Coca-Cola Consolidated Inc. (NASDAQ:COKE) is even less popular than CVBF. Our overall hedge fund sentiment score for COKE is 29.7. 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. Hedge funds dodged a bullet by taking a bearish stance towards COKE. Our calculations showed that the top 20 most popular hedge fund stocks returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th but managed to beat the market again by 16.2 percentage points. Unfortunately COKE wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); COKE investors were disappointed as the stock returned 7.1% since the end of the third quarter (through 12/8) 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 most of these stocks already outperformed the market so far in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.