Hedge Funds Are Getting Addicted To Crown Holdings, Inc. (CCK)

Is Crown Holdings, Inc. (NYSE:CCK) a good bet right now? We like to analyze hedge fund sentiment before conducting days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.

Crown Holdings, Inc. (NYSE:CCK) was in 42 hedge funds’ portfolios at the end of September. CCK has seen an increase in support from the world’s most elite money managers of late. There were 35 hedge funds in our database with CCK holdings at the end of the previous quarter. Our calculations also showed that CCK isn’t among the 30 most popular stocks among hedge funds.

In today’s marketplace there are tons of indicators stock traders use to size up stocks. A pair of the most underrated indicators are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the best picks of the elite fund managers can trounce the broader indices by a superb amount (see the details here).

Andreas Halvorsen

Andreas Halvorsen of Viking Global

Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. Let’s take a peek at the latest hedge fund action surrounding Crown Holdings, Inc. (NYSE:CCK).

How have hedgies been trading Crown Holdings, Inc. (NYSE:CCK)?

Heading into the fourth quarter of 2019, a total of 42 of the hedge funds tracked by Insider Monkey were long this stock, a change of 20% from the second quarter of 2019. The graph below displays the number of hedge funds with bullish position in CCK over the last 17 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).

No of Hedge Funds with CCK Positions

Among these funds, Lyrical Asset Management held the most valuable stake in Crown Holdings, Inc. (NYSE:CCK), which was worth $313.4 million at the end of the third quarter. On the second spot was Rivulet Capital which amassed $131 million worth of shares. Millennium Management, Adage Capital Management, and Viking Global 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 Rivulet Capital allocated the biggest weight to Crown Holdings, Inc. (NYSE:CCK), around 14.86% of its portfolio. SAYA Management is also relatively very bullish on the stock, earmarking 11.08 percent of its 13F equity portfolio to CCK.

As aggregate interest increased, key hedge funds have been driving this bullishness. Alyeska Investment Group, managed by Anand Parekh, assembled the most valuable position in Crown Holdings, Inc. (NYSE:CCK). Alyeska Investment Group had $67.4 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also initiated a $26.5 million position during the quarter. The other funds with brand new CCK positions are Mark Kingdon’s Kingdon Capital, David E. Shaw’s D E Shaw, and Guy Shahar’s DSAM Partners.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Crown Holdings, Inc. (NYSE:CCK) but similarly valued. We will take a look at Beyond Meat, Inc. (NASDAQ:BYND), Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY), NICE Ltd. (NASDAQ:NICE), and Melco Resorts & Entertainment Limited (NASDAQ:MLCO). This group of stocks’ market values are closest to CCK’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BYND 17 92936 1
ALNY 29 779948 -6
NICE 16 375883 -3
MLCO 24 533835 2
Average 21.5 445651 -1.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 21.5 hedge funds with bullish positions and the average amount invested in these stocks was $446 million. That figure was $1267 million in CCK’s case. Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) is the most popular stock in this table. On the other hand NICE Ltd. (NASDAQ:NICE) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Crown Holdings, Inc. (NYSE:CCK) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 34.7% in 2019 through November 22nd and outperformed the S&P 500 ETF (SPY) by 8.5 percentage points. Hedge funds were also right about betting on CCK as the stock returned 12.8% during Q4 (through 11/22) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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