Companhia Brasileira de Distribuicao-ADR (CBD): Are Hedge Funds Right About This Stock?

We already know that not all hedge funds are bullish on the stock and some hedge funds actually dumped their positions entirely. Interestingly, Cliff Asness’ AQR Capital Management dumped the biggest investment of the “upper crust” of funds monitored by Insider Monkey, valued at close to $5.6 million in stock. Renaissance Technologies also dropped its stock, about $0.7 million worth of CBD shares.

Let’s also examine hedge fund activity in other stocks similar to Companhia Brasileira de Distribuicao-ADR (NYSE:CBD). We will take a look at Santander Consumer USA Holdings Inc (NYSE:SC), Carter’s, Inc. (NYSE:CRI), Acadia Healthcare Company Inc (NASDAQ:ACHC), and HollyFrontier Corp (NYSE:HFC). This group of stocks’ market caps are similar to CBD’s market cap.

As you can see these stocks had an average of 27 hedge funds with bullish positions and the average amount invested in these stocks was $502 million. That figure was $38 million in CBD’s case. Carter’s, Inc. (NYSE:CRI) is the most popular stock in this table. On the other hand Acadia Healthcare Company Inc (NASDAQ:ACHC) is the least popular one with only 22 bullish hedge fund positions. Compared to these stocks Companhia Brasileira de Distribuicao-ADR (NYSE:CBD) is even less popular than ACHC. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

Disclosure: None