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Here is What Hedge Funds Think About Americold Realty Trust (COLD)

The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought Americold Realty Trust (NYSE:COLD) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.

Is Americold Realty Trust (NYSE:COLD) a buy right now? Hedge funds were in an optimistic mood. The number of bullish hedge fund bets rose by 4 recently. Americold Realty Trust (NYSE:COLD) was in 29 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 31. Our calculations also showed that COLD isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). There were 25 hedge funds in our database with COLD positions at the end of the first quarter.

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

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 56 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 34% through August 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

David E. Shaw of D.E. Shaw

David E. Shaw of D.E. Shaw

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, this “mom” trader turned $2000 into $2 million within 2 years. So, we are checking out her best trade idea of the month. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind we’re going to take a peek at the key hedge fund action regarding Americold Realty Trust (NYSE:COLD).

How are hedge funds trading Americold Realty Trust (NYSE:COLD)?

At second quarter’s end, a total of 29 of the hedge funds tracked by Insider Monkey were long this stock, a change of 16% from the previous quarter. By comparison, 30 hedge funds held shares or bullish call options in COLD 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.

Among these funds, V3 Capital held the most valuable stake in Americold Realty Trust (NYSE:COLD), which was worth $66.1 million at the end of the third quarter. On the second spot was D E Shaw which amassed $57.6 million worth of shares. Millennium Management, Waterfront Capital Partners, and JS Capital 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 V3 Capital allocated the biggest weight to Americold Realty Trust (NYSE:COLD), around 15.25% of its 13F portfolio. Hudson Way Capital Management is also relatively very bullish on the stock, setting aside 7.04 percent of its 13F equity portfolio to COLD.

As aggregate interest increased, specific money managers were leading the bulls’ herd. Winton Capital Management, managed by David Harding, assembled the largest position in Americold Realty Trust (NYSE:COLD). Winton Capital Management had $2.9 million invested in the company at the end of the quarter. Benjamin A. Smith’s Laurion Capital Management also initiated a $1.1 million position during the quarter. The following funds were also among the new COLD investors: Dmitry Balyasny’s Balyasny Asset Management, Noam Gottesman’s GLG Partners, and Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors.

Let’s go over hedge fund activity in other stocks similar to Americold Realty Trust (NYSE:COLD). These stocks are Formula One Group (NASDAQ:FWONA), Mohawk Industries, Inc. (NYSE:MHK), AGNC Investment Corp. (NASDAQ:AGNC), AptarGroup, Inc. (NYSE:ATR), Companhia de Saneamento Básico do Estado de São Paulo – SABESP (NYSE:SBS), WEX Inc (NYSE:WEX), and Five9 Inc (NASDAQ:FIVN). All of these stocks’ market caps are closest to COLD’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
FWONA 17 248890 0
MHK 32 693381 -4
AGNC 37 458061 10
ATR 26 210604 6
SBS 10 270233 2
WEX 24 399174 -11
FIVN 44 1130157 11
Average 27.1 487214 2

View table here if you experience formatting issues.

As you can see these stocks had an average of 27.1 hedge funds with bullish positions and the average amount invested in these stocks was $487 million. That figure was $290 million in COLD’s case. Five9 Inc (NASDAQ:FIVN) is the most popular stock in this table. On the other hand Companhia de Saneamento Básico do Estado de São Paulo – SABESP (NYSE:SBS) is the least popular one with only 10 bullish hedge fund positions. Americold Realty Trust (NYSE:COLD) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for COLD is 65. 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 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 23.8% in 2020 through September 14th and beat the market by 17.6 percentage points. Unfortunately COLD wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on COLD were disappointed as the stock returned 1.8% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.

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