Hedge Funds Are Cashing Out Of Camping World Holdings, Inc. (CWH)

As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the fourth quarter of 2019. A significant number of hedge funds continued their strong performance in 2020 and 2021 as well. We get to see hedge funds’ thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Camping World Holdings, Inc. (NYSE:CWH).

Camping World Holdings, Inc. (NYSE:CWH) has seen a decrease in activity from the world’s largest hedge funds recently. Camping World Holdings, Inc. (NYSE:CWH) was in 24 hedge funds’ portfolios at the end of March. The all time high for this statistic is 29. There were 27 hedge funds in our database with CWH positions at the end of the fourth quarter. Our calculations also showed that CWH isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

David Abrams

David Abrams of Abrams Capital Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now we’re going to check out the recent hedge fund action encompassing Camping World Holdings, Inc. (NYSE:CWH).

Do Hedge Funds Think CWH Is A Good Stock To Buy Now?

At the end of the first quarter, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of -11% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards CWH over the last 23 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).

The largest stake in Camping World Holdings, Inc. (NYSE:CWH) was held by Abrams Capital Management, which reported holding $185.9 million worth of stock at the end of December. It was followed by CaaS Capital with a $20.3 million position. Other investors bullish on the company included D E Shaw, Millennium Management, and Tontine Asset Management. In terms of the portfolio weights assigned to each position Abrams Capital Management allocated the biggest weight to Camping World Holdings, Inc. (NYSE:CWH), around 4.18% of its 13F portfolio. Harspring Capital Management is also relatively very bullish on the stock, earmarking 1.97 percent of its 13F equity portfolio to CWH.

Since Camping World Holdings, Inc. (NYSE:CWH) has faced bearish sentiment from the smart money, it’s safe to say that there lies a certain “tier” of hedgies that elected to cut their full holdings in the first quarter. Interestingly, Renaissance Technologies cut the largest investment of the “upper crust” of funds monitored by Insider Monkey, comprising close to $21.2 million in stock, and Phill Gross and Robert Atchinson’s Adage Capital Management was right behind this move, as the fund cut about $14.3 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 3 funds in the first quarter.

Let’s check out hedge fund activity in other stocks similar to Camping World Holdings, Inc. (NYSE:CWH). We will take a look at Onto Innovation Inc. (NYSE:ONTO), Terex Corporation (NYSE:TEX), Brookfield Business Partners L.P. (NYSE:BBU), Danimer Scientific, Inc. (NYSE:DNMR), Werner Enterprises, Inc. (NASDAQ:WERN), Simmons First National Corporation (NASDAQ:SFNC), and Hilton Grand Vacations Inc. (NYSE:HGV). All of these stocks’ market caps are similar to CWH’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ONTO 18 297070 -1
TEX 31 501779 8
BBU 3 6237 0
DNMR 30 533383 12
WERN 21 213603 -3
SFNC 12 22164 6
HGV 34 783198 3
Average 21.3 336776 3.6

View table here if you experience formatting issues.

As you can see these stocks had an average of 21.3 hedge funds with bullish positions and the average amount invested in these stocks was $337 million. That figure was $326 million in CWH’s case. Hilton Grand Vacations Inc. (NYSE:HGV) is the most popular stock in this table. On the other hand Brookfield Business Partners L.P. (NYSE:BBU) is the least popular one with only 3 bullish hedge fund positions. Camping World Holdings, Inc. (NYSE:CWH) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CWH is 60.7. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 23.8% in 2021 through July 16th and beat the market again by 7.7 percentage points. Unfortunately CWH wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CWH were disappointed as the stock returned 3.2% since the end of March (through 7/16) 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 many of these stocks already outperformed the market since 2019.

Follow Camping World Holdings Inc. (NYSE:CWH)

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Disclosure: None. This article was originally published at Insider Monkey.