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Hedge Funds Like Molson Coors Brewing Company (TAP)’s Recipe for Success

Is Molson Coors Brewing Company (NYSE:TAP) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before doing days of research on it. Given their 2-and-20 payment structure, hedge funds have more resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also have numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.

Molson Coors Brewing Company (NYSE:TAP) was in 70 hedge funds’ portfolios at the end of the third quarter of 2015. Molson Coors Brewing Company investors should be aware of an increase in enthusiasm from smart money of late. There were 66 hedge funds in our database with Molson Coors Brewing Company holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Nordstrom, Inc. (NYSE:JWN), WestRock Co (NYSE:WRK), and Ingersoll-Rand PLC (NYSE:IR) to gather more data points.

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To most investors, hedge funds are perceived as slow, old financial tools of years past. While there are greater than 8,000 funds in operation today, our researchers choose to focus on the upper echelon of this club, about 700 funds. Most estimates calculate that this group of people orchestrate the lion’s share of the hedge fund industry’s total capital, and by tailing their finest investments, Insider Monkey has determined many investment strategies that have historically outrun Mr. Market. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points a year for a decade in their back tests.

Keeping this in mind, let’s take a peek at the key action encompassing Molson Coors Brewing Company (NYSE:TAP).

How have hedgies been trading Molson Coors Brewing Company (NYSE:TAP)?

Heading into Q4, a total of 70 of the hedge funds tracked by Insider Monkey were long this stock, a 6% hike from the second quarter. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their holdings substantially (or had already accumulated large positions)

According to Insider Monkey’s hedge fund database, Mason Capital Management, managed by Kenneth Mario Garschina, holds the number one position in Molson Coors Brewing Company (NYSE:TAP). Mason Capital Management has a $294.6 million position in the stock, comprising 6.2% of its 13F portfolio. On Mason Capital Management’s heels is Citadel Investment Group, managed by Ken Griffin, which holds a $251.6 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Some other peers that are bullish encompass Keith Meister’s Corvex Capital, Dan Loeb’s Third Point, and Stephen Mandel’s Lone Pine Capital.

As aggregate interest increased, specific money managers have jumped into Molson Coors Brewing Company (NYSE:TAP) headfirst. Lone Pine Capital, managed by Stephen Mandel, assembled the largest position in Molson Coors Brewing Company (NYSE:TAP). Lone Pine Capital had $161.4 million invested in the company at the end of the quarter. Alan Fournier’s Pennant Capital Management also made a $142.2 million investment in the stock during the quarter. The other funds with new positions in the stock are J Kevin Kenny Jr’s Emerging Sovereign Group, James Dinan’s York Capital Management, and Jeffrey Altman’s Owl Creek Asset Management.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Molson Coors Brewing Company (NYSE:TAP) but similarly valued. We will take a look at Nordstrom, Inc. (NYSE:JWN), WestRock Co (NYSE:WRK), Ingersoll-Rand PLC (NYSE:IR), and Parker-Hannifin Corporation (NYSE:PH). All of these stocks’ market caps are similar to Molson Coors Brewing Company’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
JWN 38 840884 11
WRK 42 1474208 41
IR 42 1439823 5
PH 25 847557 5

As you can see these stocks had an average of 36.75 hedge funds with bullish positions and the average amount invested in these stocks was $1.15 billion. That figure was $3.07 billion in Molson Coors Brewing Company’s case. WestRock Co (NYSE:WRK) is the most popular stock in this table. On the other hand Parker-Hannifin Corporation (NYSE:PH) is the least popular one with only 25 bullish hedge fund positions. Compared to these stocks Molson Coors Brewing Company (NYSE:TAP) is far more popular among hedge funds and has far more money invested in it. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

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