Hedge Funds Are Cashing Out Of Monster Beverage Corp (MNST)

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. What do these smart investors think about Monster Beverage Corp (NASDAQ:MNST)?

Monster Beverage Corp (NASDAQ:MNST) was in 43 hedge funds’ portfolios at the end of the first quarter of 2020. MNST shareholders have witnessed a decrease in support from the world’s most elite money managers recently. There were 45 hedge funds in our database with MNST holdings at the end of the previous quarter. Our calculations also showed that MNST isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

In the eyes of most investors, hedge funds are assumed to be worthless, old investment vehicles of the past. While there are greater than 8000 funds in operation at present, Our researchers choose to focus on the leaders of this group, approximately 850 funds. These investment experts have their hands on most of all hedge funds’ total asset base, and by shadowing their top picks, Insider Monkey has uncovered numerous investment strategies that have historically outrun the broader indices. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

Aaron Cowen Suvretta Capital

Aaron Cowen of Suvretta Capital Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we are still not out of the woods in terms of the coronavirus pandemic. So, we checked out this successful trader’s “corona catalyst plays“. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s go over the latest hedge fund action regarding Monster Beverage Corp (NASDAQ:MNST).

What have hedge funds been doing with Monster Beverage Corp (NASDAQ:MNST)?

Heading into the second quarter of 2020, a total of 43 of the hedge funds tracked by Insider Monkey were long this stock, a change of -4% from one quarter earlier. On the other hand, there were a total of 33 hedge funds with a bullish position in MNST a year ago. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, holds the largest position in Monster Beverage Corp (NASDAQ:MNST). Renaissance Technologies has a $765.5 million position in the stock, comprising 0.7% of its 13F portfolio. The second most bullish fund manager is Broadwood Capital, led by Neal C. Bradsher, holding a $262 million position; 30.6% of its 13F portfolio is allocated to the stock. Some other hedge funds and institutional investors that are bullish encompass Cliff Asness’s AQR Capital Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and John Overdeck and David Siegel’s Two Sigma Advisors. In terms of the portfolio weights assigned to each position Broadwood Capital allocated the biggest weight to Monster Beverage Corp (NASDAQ:MNST), around 30.62% of its 13F portfolio. Incline Global Management is also relatively very bullish on the stock, designating 5.06 percent of its 13F equity portfolio to MNST.

Because Monster Beverage Corp (NASDAQ:MNST) has faced falling interest from the smart money, it’s easy to see that there were a few funds who sold off their positions entirely heading into Q4. Interestingly, Andreas Halvorsen’s Viking Global sold off the largest position of the 750 funds followed by Insider Monkey, totaling about $822.6 million in stock, and Ricky Sandler’s Eminence Capital was right behind this move, as the fund dumped about $144.3 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 2 funds heading into Q4.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Monster Beverage Corp (NASDAQ:MNST) but similarly valued. These stocks are The Kraft Heinz Company (NASDAQ:KHC), General Motors Company (NYSE:GM), Workday Inc (NASDAQ:WDAY), and Canadian Pacific Railway Limited (NYSE:CP). This group of stocks’ market valuations are closest to MNST’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
KHC 39 8314956 5
GM 53 3020405 -22
WDAY 58 2259501 3
CP 32 1568644 3
Average 45.5 3790877 -2.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 45.5 hedge funds with bullish positions and the average amount invested in these stocks was $3791 million. That figure was $1844 million in MNST’s case. Workday Inc (NASDAQ:WDAY) is the most popular stock in this table. On the other hand Canadian Pacific Railway Limited (NYSE:CP) is the least popular one with only 32 bullish hedge fund positions. Monster Beverage Corp (NASDAQ:MNST) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May and still beat the market by 13.2 percentage points. A small number of hedge funds were also right about betting on MNST as the stock returned 27.8% during the second quarter and outperformed the market by an even larger margin.

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