We know that hedge funds generate strong, risk-adjusted returns over the long run, which is why imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, professional investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do. However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, let’s examine the smart money sentiment towards Coca-Cola European Partners plc (NYSE:CCEP) and determine whether hedge funds skillfully traded this stock.
Coca-Cola European Partners plc (NYSE:CCEP) has seen an increase in support from the world’s most elite money managers in recent months. Coca-Cola European Partners plc (NYSE:CCEP) was in 32 hedge funds’ portfolios at the end of September. The all time high for this statistic is 40. Our calculations also showed that CCEP isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Larry Robbins of Glenview Capital
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 analyze the latest hedge fund action encompassing Coca-Cola European Partners plc (NYSE:CCEP).
Do Hedge Funds Think CCEP Is A Good Stock To Buy Now?
At the end of September, a total of 32 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 3% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CCEP over the last 25 quarters. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).
The largest stake in Coca-Cola European Partners plc (NYSE:CCEP) was held by Polaris Capital Management, which reported holding $193.2 million worth of stock at the end of September. It was followed by Hengistbury Investment Partners with a $133.7 million position. Other investors bullish on the company included Candlestick Capital Management, Glenview Capital, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Hengistbury Investment Partners allocated the biggest weight to Coca-Cola European Partners plc (NYSE:CCEP), around 19.77% of its 13F portfolio. Kehrs Ridge Capital is also relatively very bullish on the stock, dishing out 7.94 percent of its 13F equity portfolio to CCEP.
As one would reasonably expect, key hedge funds have been driving this bullishness. Millennium Management, managed by Israel Englander, created the largest call position in Coca-Cola European Partners plc (NYSE:CCEP). Millennium Management had $15.6 million invested in the company at the end of the quarter. Peter Avellone’s Cartenna Capital also made a $14.1 million investment in the stock during the quarter. The other funds with brand new CCEP positions are Alexander Mitchell’s Scopus Asset Management, Renaissance Technologies, and Greg Poole’s Echo Street Capital Management.
Let’s check out hedge fund activity in other stocks similar to Coca-Cola European Partners plc (NYSE:CCEP). We will take a look at PT Telekomunikasi Indonesia (NYSE:TLK), Toast Inc. (NYSE:TOST), CDW Corporation (NASDAQ:CDW), Avantor, Inc. (NYSE:AVTR), Ryanair Holdings plc (NASDAQ:RYAAY), Franco-Nevada Corporation (NYSE:FNV), and AmerisourceBergen Corporation (NYSE:ABC). This group of stocks’ market caps resemble CCEP’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TLK | 4 | 170252 | -1 |
| TOST | 38 | 567350 | 38 |
| CDW | 37 | 1906004 | 10 |
| AVTR | 53 | 2439815 | 9 |
| RYAAY | 15 | 411390 | 0 |
| FNV | 26 | 951083 | 3 |
| ABC | 44 | 1214780 | 1 |
| Average | 31 | 1094382 | 8.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 31 hedge funds with bullish positions and the average amount invested in these stocks was $1094 million. That figure was $1193 million in CCEP’s case. Avantor, Inc. (NYSE:AVTR) is the most popular stock in this table. On the other hand PT Telekomunikasi Indonesia (NYSE:TLK) is the least popular one with only 4 bullish hedge fund positions. Coca-Cola European Partners plc (NYSE:CCEP) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CCEP is 58.6. 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. Hedge funds were also right about betting on CCEP as the stock returned 6.5% since the end of Q3 (through 1/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Coca-Cola European Partners Plc (NYSE:CCEP)
Follow Coca-Cola European Partners Plc (NYSE:CCEP)
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Disclosure: None. This article was originally published at Insider Monkey.
