Is CPRI A Good Stock To Buy According To Hedge Funds?

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Capri Holdings Limited (NYSE:CPRI).

Is CPRI a good stock to buy? Capri Holdings Limited (NYSE:CPRI) was in 36 hedge funds’ portfolios at the end of September. The all time high for this statistic is 47. CPRI has seen an increase in hedge fund interest lately. There were 28 hedge funds in our database with CPRI positions at the end of the second quarter. Our calculations also showed that CPRI isn’t among the 30 most popular stocks among hedge funds (click for Q3 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.

In the eyes of most investors, hedge funds are assumed to be underperforming, old investment vehicles of the past. While there are greater than 8000 funds trading at present, Our researchers look at the crème de la crème of this group, approximately 850 funds. These hedge fund managers preside over the lion’s share of the smart money’s total capital, and by tracking their best equity investments, Insider Monkey has found various investment strategies that have historically beaten the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .

Robert Pohly of Samlyn Capital

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Keeping this in mind let’s take a peek at the new hedge fund action surrounding Capri Holdings Limited (NYSE:CPRI).

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

At the end of the third quarter, a total of 36 of the hedge funds tracked by Insider Monkey were long this stock, a change of 29% from the previous quarter. By comparison, 41 hedge funds held shares or bullish call options in CPRI a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Eminence Capital held the most valuable stake in Capri Holdings Limited (NYSE:CPRI), which was worth $133.7 million at the end of the third quarter. On the second spot was Rima Senvest Management which amassed $52 million worth of shares. Arrowstreet Capital, Samlyn Capital, and Holocene Advisors 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 Proxima Capital Management allocated the biggest weight to Capri Holdings Limited (NYSE:CPRI), around 11.12% of its 13F portfolio. Rima Senvest Management is also relatively very bullish on the stock, setting aside 2.95 percent of its 13F equity portfolio to CPRI.

Now, key money managers were breaking ground themselves. Samlyn Capital, managed by Robert Pohly, created the most valuable position in Capri Holdings Limited (NYSE:CPRI). Samlyn Capital had $26.4 million invested in the company at the end of the quarter. Brandon Haley’s Holocene Advisors also made a $26 million investment in the stock during the quarter. The following funds were also among the new CPRI investors: Steve Cohen’s Point72 Asset Management, James Parsons’s Junto Capital Management, and Gregg Moskowitz’s Interval Partners.

Let’s now review hedge fund activity in other stocks similar to Capri Holdings Limited (NYSE:CPRI). These stocks are Holdings Inc (NASDAQ:ALRM), Amkor Technology, Inc. (NASDAQ:AMKR), Casella Waste Systems Inc. (NASDAQ:CWST), Green Dot Corporation (NYSE:GDOT), Papa John’s International, Inc. (NASDAQ:PZZA), Pinnacle Financial Partners, Inc. (NASDAQ:PNFP), and Innovative Industrial Properties, Inc. (NYSE:IIPR). All of these stocks’ market caps match CPRI’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ALRM 24 215299 0
AMKR 27 98077 4
CWST 17 145606 1
GDOT 28 539024 5
PZZA 38 392909 4
PNFP 22 48850 8
IIPR 20 235842 0
Average 25.1 239372 3.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 25.1 hedge funds with bullish positions and the average amount invested in these stocks was $239 million. That figure was $427 million in CPRI’s case. Papa John’s International, Inc. (NASDAQ:PZZA) is the most popular stock in this table. On the other hand Casella Waste Systems Inc. (NASDAQ:CWST) is the least popular one with only 17 bullish hedge fund positions. Capri Holdings Limited (NYSE:CPRI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CPRI is 78.2. 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 33.3% in 2020 through December 18th and still beat the market by 16.4 percentage points. Hedge funds were also right about betting on CPRI as the stock returned 132.4% since the end of Q3 (through 12/18) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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