At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.
Coca-Cola FEMSA, S.A.B. de C.V. (ADR) (NYSE:KOF) investors should be aware of an increase in hedge fund interest lately. There were 11 hedge funds in our database with KOF holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Symantec Corporation (NASDAQ:SYMC), Northern Trust Corporation (NASDAQ:NTRS), and TransDigm Group Incorporated (NYSE:TDG) to gather more data points.
Follow Coca Cola Femsa S A B De C V (NYSE:KOF)
Follow Coca Cola Femsa S A B De C V (NYSE:KOF)
We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.
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Now, let’s check out the new action surrounding Coca-Cola FEMSA, S.A.B. de C.V. (ADR) (NYSE:KOF).
What have hedge funds been doing with Coca-Cola FEMSA, S.A.B. de C.V. (ADR) (NYSE:KOF)?
Heading into the fourth quarter of 2016, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 9% from one quarter earlier. By comparison, 9 hedge funds held shares or bullish call options in KOF heading into this year. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Bill & Melinda Gates Foundation Trust, led by Michael Larson, holds the largest position in Coca-Cola FEMSA, S.A.B. de C.V. (ADR) (NYSE:KOF). Bill & Melinda Gates Foundation Trust has a $466.1 million position in the stock, comprising 2.5% of its 13F portfolio. The second largest stake is held by Renaissance Technologies, one of the largest hedge funds in the world, holding a $66.4 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining peers with similar optimism include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Israel Englander’s Millennium Management and David Halpert’s Prince Street Capital Management. We should note that none of these elite funds are among our list of the 100 best performing elite funds which is based on the performance of their 13F long positions in non-microcap stocks.
Now, key hedge funds were leading the bulls’ herd. Prince Street Capital Management, led by David Halpert, initiated the largest position in Coca-Cola FEMSA, S.A.B. de C.V. (ADR) (NYSE:KOF). Prince Street Capital Management had $4.2 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $1.6 million position during the quarter. The only other fund with a brand new KOF position is Ken Griffin’s Citadel Investment Group.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Coca-Cola FEMSA, S.A.B. de C.V. (ADR) (NYSE:KOF) but similarly valued. These stocks are Symantec Corporation (NASDAQ:SYMC), Northern Trust Corporation (NASDAQ:NTRS), TransDigm Group Incorporated (NYSE:TDG), and Noble Energy, Inc. (NYSE:NBL). This group of stocks’ market values resemble KOF’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SYMC | 37 | 1276940 | -1 |
| NTRS | 30 | 486076 | 3 |
| TDG | 44 | 3477124 | 2 |
| NBL | 33 | 1366115 | -3 |
As you can see these stocks had an average of 36 hedge funds with bullish positions and the average amount invested in these stocks was $1652 million. That figure was $561 million in KOF’s case. TransDigm Group Incorporated (NYSE:TDG) is the most popular stock in this table. On the other hand Northern Trust Corporation (NASDAQ:NTRS) is the least popular one with only 30 bullish hedge fund positions. Compared to these stocks Coca-Cola FEMSA, S.A.B. de C.V. (ADR) (NYSE:KOF) is even less popular than NTRS. 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.
