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Carlisle Companies, Inc. (CSL): Are Hedge Funds Right About This Stock?

Most investors tend to think that hedge funds and other asset managers are worthless, as they cannot beat even simple index fund portfolios. In fact, most people expect hedge funds to compete with and outperform the bull market that we have witnessed over the past few years. However, hedge funds are generally partially hedged and aim at delivering attractive risk-adjusted returns rather than following the ups and downs of equity markets hoping that they will outperform the broader market. Our research shows that hedge funds do have great stock picking skills, so let’s take a glance at the smart money sentiment towards Carlisle Companies, Inc. (NYSE:CSL).

Hedge fund interest in Carlisle Companies, Inc. (NYSE:CSL) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare CSL to other stocks including Marine Harvest ASA (NYSE:MHG), Leggett & Platt, Inc. (NYSE:LEG), and Brookfield Property Partners LP (NYSE:BPY) to get a better sense of its popularity.

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Keeping this in mind, let’s take a peek at the new action encompassing Carlisle Companies, Inc. (NYSE:CSL).

What does the smart money think about Carlisle Companies, Inc. (NYSE:CSL)?

At Q3’s end, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Anand Parekh’s Alyeska Investment Group has the largest position in Carlisle Companies, Inc. (NYSE:CSL), worth close to $47.3 million, amounting to 0.6% of its total 13F portfolio. The second largest stake is held by Matthew Lindenbaum of Basswood Capital, with a $29.5 million position; the fund has 1.5% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that hold long positions contain Chuck Royce’s Royce & Associates, Cliff Asness’ AQR Capital Management and Steve Cohen’s Point72 Asset Management.

Intriguingly, Israel Englander’s Millennium Management dropped the biggest position of the 700 funds monitored by Insider Monkey, totaling an estimated $29 million in stock. Clint Carlson’s fund, Carlson Capital, also sold off its stock, about $11.4 million worth. These moves are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s also examine hedge fund activity in other stocks similar to Carlisle Companies, Inc. (NYSE:CSL). These stocks are Marine Harvest ASA (NYSE:MHG), Leggett & Platt, Inc. (NYSE:LEG), Brookfield Property Partners LP (NYSE:BPY), and Zions Bancorporation (NASDAQ:ZION). All of these stocks’ market caps are similar to CSL’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MHG 4 7008 0
LEG 23 133339 11
BPY 7 9826 2
ZION 32 551496 -4

As you can see these stocks had an average of 16.5 hedge funds with bullish positions and the average amount invested in these stocks was $175 million. That figure was $173 million in CSL’s case. Zions Bancorporation (NASDAQ:ZION) is the most popular stock in this table. On the other hand Marine Harvest ASA (NYSE:MHG) is the least popular one with only 4 bullish hedge fund positions. Carlisle Companies, Inc. (NYSE:CSL) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ZION might be a better candidate to consider a long position.

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