Is Crown Holdings, Inc. (CCK) A Good Stock To Buy?

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the second quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Crown Holdings, Inc. (NYSE:CCK) based on that data.

Is Crown Holdings, Inc. (NYSE:CCK) a good stock to buy? Investors who are in the know were getting less optimistic. The number of bullish hedge fund positions went down by 7 recently. Crown Holdings, Inc. (NYSE:CCK) was in 53 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 63. Our calculations also showed that CCK isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 60 hedge funds in our database with CCK holdings at the end of March.

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. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. 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 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. With all of this in mind we’re going to take a look at the key hedge fund action regarding Crown Holdings, Inc. (NYSE:CCK).

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

At the end of June, a total of 53 of the hedge funds tracked by Insider Monkey were long this stock, a change of -12% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in CCK over the last 24 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Lyrical Asset Management, managed by Andrew Wellington and Jeff Keswin, holds the largest position in Crown Holdings, Inc. (NYSE:CCK). Lyrical Asset Management has a $328.8 million position in the stock, comprising 4% of its 13F portfolio. Coming in second is Southpoint Capital Advisors, led by John Smith Clark, holding a $154.6 million position; the fund has 2.7% of its 13F portfolio invested in the stock. Other professional money managers that are bullish contain Lee Ainslie’s Maverick Capital, D. E. Shaw’s D E Shaw and David S. Winter and David J. Millstone’s 40 North Management. In terms of the portfolio weights assigned to each position SAYA Management allocated the biggest weight to Crown Holdings, Inc. (NYSE:CCK), around 16.32% of its 13F portfolio. Engle Capital is also relatively very bullish on the stock, setting aside 12.47 percent of its 13F equity portfolio to CCK.

Judging by the fact that Crown Holdings, Inc. (NYSE:CCK) has experienced a decline in interest from the entirety of the hedge funds we track, it’s easy to see that there was a specific group of money managers that decided to sell off their positions entirely heading into Q3. It’s worth mentioning that Benjamin Pass’s TOMS Capital said goodbye to the largest investment of all the hedgies followed by Insider Monkey, worth an estimated $78.1 million in stock, and Martin D. Sass’s MD Sass was right behind this move, as the fund sold off about $30.5 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 7 funds heading into Q3.

Let’s now take a look at 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 IAC/InterActiveCorp (NASDAQ:IAC), Tuya Inc. (NYSE:TUYA), RLX Technology Inc. (NYSE:RLX), CureVac N.V. (NASDAQ:CVAC), Whirlpool Corporation (NYSE:WHR), American Airlines Group Inc (NASDAQ:AAL), and Centrais Elétricas Brasileiras S.A. – Eletrobrás (NYSE:EBR). This group of stocks’ market values are closest to CCK’s market value.

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As you can see these stocks had an average of 20.6 hedge funds with bullish positions and the average amount invested in these stocks was $495 million. That figure was $1981 million in CCK’s case. IAC/InterActiveCorp (NASDAQ:IAC) is the most popular stock in this table. On the other hand Centrais Elétricas Brasileiras S.A. – Eletrobrás (NYSE:EBR) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Crown Holdings, Inc. (NYSE:CCK) is more popular among hedge funds. Our overall hedge fund sentiment score for CCK is 73.2. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 22.9% in 2021 through October 1st and still beat the market by 5.6 percentage points. Unfortunately CCK wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CCK were disappointed as the stock returned -1.9% since the end of the second quarter (through 10/1) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

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