The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, when the S&P 500 Index was trading around the 4300 level. Since then investors decided to bet on the economic recovery and a stock market rebound even though we experienced a temporary correction in January. In this article you are going to find out whether hedge funds thought Catalent Inc (NYSE:CTLT) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.
Catalent Inc (NYSE:CTLT) has seen a decrease in hedge fund interest in recent months. Catalent Inc (NYSE:CTLT) was in 38 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 40. Our calculations also showed that CTLT isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Ole Andreas Halvorsen of Viking Global
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind we’re going to take a glance at the recent hedge fund action surrounding Catalent Inc (NYSE:CTLT).
Do Hedge Funds Think CTLT Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 38 of the hedge funds tracked by Insider Monkey were long this stock, a change of -5% from the previous quarter. On the other hand, there were a total of 40 hedge funds with a bullish position in CTLT a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Third Point was the largest shareholder of Catalent Inc (NYSE:CTLT), with a stake worth $183 million reported as of the end of September. Trailing Third Point was Viking Global, which amassed a stake valued at $154.8 million. Palestra Capital Management, Farallon Capital, and Millennium 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 Tower House Partners allocated the biggest weight to Catalent Inc (NYSE:CTLT), around 27.05% of its 13F portfolio. Highline Capital Management is also relatively very bullish on the stock, designating 5.7 percent of its 13F equity portfolio to CTLT.
Due to the fact that Catalent Inc (NYSE:CTLT) has experienced declining sentiment from the entirety of the hedge funds we track, logic holds that there is a sect of money managers that elected to cut their full holdings last quarter. Intriguingly, Jeremy Green’s Redmile Group cut the largest stake of the “upper crust” of funds monitored by Insider Monkey, totaling an estimated $33.5 million in stock. Paul Marshall and Ian Wace’s fund, Marshall Wace LLP, also dumped its stock, about $22.1 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 2 funds last quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Catalent Inc (NYSE:CTLT) but similarly valued. These stocks are Ginkgo Bioworks Holdings Inc. (NYSE:DNA), Royal Caribbean Cruises Ltd. (NYSE:RCL), Magna International Inc. (NYSE:MGA), CNH Industrial NV (NYSE:CNHI), Extra Space Storage, Inc. (NYSE:EXR), Northern Trust Corporation (NASDAQ:NTRS), and XP Inc. (NASDAQ:XP). All of these stocks’ market caps are closest to CTLT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DNA | 32 | 5696252 | 32 |
| RCL | 35 | 575404 | -7 |
| MGA | 29 | 444703 | -10 |
| CNHI | 25 | 909259 | 1 |
| EXR | 27 | 405036 | 6 |
| NTRS | 34 | 535076 | 2 |
| XP | 28 | 674196 | 3 |
| Average | 30 | 1319989 | 3.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 30 hedge funds with bullish positions and the average amount invested in these stocks was $1320 million. That figure was $1114 million in CTLT’s case. Royal Caribbean Cruises Ltd. (NYSE:RCL) is the most popular stock in this table. On the other hand CNH Industrial NV (NYSE:CNHI) is the least popular one with only 25 bullish hedge fund positions. Compared to these stocks Catalent Inc (NYSE:CTLT) is more popular among hedge funds. Our overall hedge fund sentiment score for CTLT is 81.5. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. Unfortunately, CTLT wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CTLT were disappointed as the stock returned -21.9% since the end of the third quarter (through 1/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as all of these stocks already outperformed the market since 2019.
Follow Catalent Inc. (NYSE:CTLT)
Follow Catalent Inc. (NYSE:CTLT)
Suggested Articles:
- 20 Best Airlines in the World in 2021
- 30 Most Religious Cities in the US
- Seth Klarman’s Top 10 Stock Picks
Disclosure: None. This article was originally published at Insider Monkey.
