Here is What Hedge Funds Think About Cosan Limited (CZZ)

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 Cosan Limited (NYSE:CZZ)?

Cosan Limited (NYSE:CZZ) has experienced an increase in hedge fund interest recently. Our calculations also showed that CZZ 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.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 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 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.


Lee Ainslie of Maverick Capital

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, we take a look at lists like the 10 PayPal alternatives for international payments to identify emerging companies that are likely to deliver 1000% gains in the coming years. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to take a peek at the recent hedge fund action encompassing Cosan Limited (NYSE:CZZ).

Hedge fund activity in Cosan Limited (NYSE:CZZ)

At Q1’s end, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of 25% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CZZ over the last 18 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Renaissance Technologies was the largest shareholder of Cosan Limited (NYSE:CZZ), with a stake worth $110.4 million reported as of the end of September. Trailing Renaissance Technologies was Two Sigma Advisors, which amassed a stake valued at $9.2 million. Arrowstreet Capital, Moon Capital, and Millennium 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 Moon Capital allocated the biggest weight to Cosan Limited (NYSE:CZZ), around 2.88% of its 13F portfolio. RIT Capital Partners is also relatively very bullish on the stock, designating 1.17 percent of its 13F equity portfolio to CZZ.

Now, key hedge funds have been driving this bullishness. Moon Capital, managed by John W. Moon, created the largest position in Cosan Limited (NYSE:CZZ). Moon Capital had $3.1 million invested in the company at the end of the quarter. Peter Muller’s PDT Partners also made a $2.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Jacob Rothschild’s RIT Capital Partners, Lee Ainslie’s Maverick Capital, and Greg Eisner’s Engineers Gate Manager.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Cosan Limited (NYSE:CZZ) but similarly valued. We will take a look at Blackbaud, Inc. (NASDAQ:BLKB), Sanderson Farms, Inc. (NASDAQ:SAFM), GW Pharmaceuticals plc (NASDAQ:GWPH), and Schrodinger, Inc. (NASDAQ:SDGR). This group of stocks’ market values match CZZ’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BLKB 22 107618 6
SAFM 17 330385 -19
GWPH 21 262831 -3
SDGR 15 542132 15
Average 18.75 310742 -0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.75 hedge funds with bullish positions and the average amount invested in these stocks was $311 million. That figure was $142 million in CZZ’s case. Blackbaud, Inc. (NASDAQ:BLKB) is the most popular stock in this table. On the other hand Schrodinger, Inc. (NASDAQ:SDGR) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Cosan Limited (NYSE:CZZ) is even less popular than SDGR. 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 13.3% in 2020 through June 25th but managed to beat the market by 16.8 percentage points. A small number of hedge funds were also right about betting on CZZ, though not to the same extent, as the stock returned 26% during the second quarter (through June 25th) and outperformed the market as well.

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