Hedge Funds Are Dumping Celanese Corporation (CE)

We at Insider Monkey have gone over 867 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article, we look at what those funds think of Celanese Corporation (NYSE:CE) based on that data.

Celanese Corporation (NYSE:CE) was in 26 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 37. CE investors should be aware of a decrease in hedge fund sentiment in recent months. There were 37 hedge funds in our database with CE holdings at the end of June. Our calculations also showed that CE isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

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. With all of this in mind we’re going to take a gander at the latest hedge fund action surrounding Celanese Corporation (NYSE:CE).

Thomas Claugus of GMT Capital

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

At the end of September, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -30% from the second quarter of 2021. By comparison, 26 hedge funds held shares or bullish call options in CE a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Holocene Advisors was the largest shareholder of Celanese Corporation (NYSE:CE), with a stake worth $227.6 million reported as of the end of September. Trailing Holocene Advisors was GMT Capital, which amassed a stake valued at $201.2 million. Millennium Management, Citadel Investment Group, and AQR Capital 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 GMT Capital allocated the biggest weight to Celanese Corporation (NYSE:CE), around 17.75% of its 13F portfolio. Holocene Advisors is also relatively very bullish on the stock, dishing out 1.24 percent of its 13F equity portfolio to CE.

Seeing as Celanese Corporation (NYSE:CE) has experienced falling interest from the aggregate hedge fund industry, it’s easy to see that there were a few hedgies who were dropping their positions entirely heading into Q4. Interestingly, John Overdeck and David Siegel’s Two Sigma Advisors cut the biggest stake of the “upper crust” of funds tracked by Insider Monkey, comprising about $23.2 million in stock. Renaissance Technologies, also cut its stock, about $20.5 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 11 funds heading into Q4.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Celanese Corporation (NYSE:CE) but similarly valued. We will take a look at Bath & Body Works Inc. (NYSE:BBWI), Full Truck Alliance Co. Ltd. (NYSE:YMM), Brookfield Infrastructure Partners L.P. (NYSE:BIP), Liberty Global plc (NASDAQ:LBTYA), Signature Bank (NASDAQ:SBNY), PPD, Inc. (NASDAQ:PPD), and EXACT Sciences Corporation (NASDAQ:EXAS). All of these stocks’ market caps match CE’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BBWI 56 6556642 3
YMM 13 263866 -7
BIP 15 104470 -1
LBTYA 34 791291 4
SBNY 46 950619 3
PPD 37 1890261 0
EXAS 40 1984372 5
Average 34.4 1791646 1

View table here if you experience formatting issues.

As you can see these stocks had an average of 34.4 hedge funds with bullish positions and the average amount invested in these stocks was $1792 million. That figure was $735 million in CE’s case. Bath & Body Works Inc. (NYSE:BBWI) is the most popular stock in this table. On the other hand Full Truck Alliance Co. Ltd. (NYSE:YMM) is the least popular one with only 13 bullish hedge fund positions. Celanese Corporation (NYSE:CE) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CE is 30.2. 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 negative signal and 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 31.1% in 2021 through December 9th and surpassed the market again by 5.1 percentage points. Unfortunately CE wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); CE investors were disappointed as the stock returned 5.7% since the end of September (through 12/9) 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 most of these stocks already outperformed the market in 2021.

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