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 887 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of December 31st, 2020. What do these smart investors think about Monster Beverage Corp (NASDAQ:MNST)?
Is MNST stock a buy or sell? Monster Beverage Corp (NASDAQ:MNST) has seen a decrease in enthusiasm from smart money in recent months. Monster Beverage Corp (NASDAQ:MNST) was in 44 hedge funds’ portfolios at the end of December. The all time high for this statistic is 50. There were 50 hedge funds in our database with MNST positions at the end of the third quarter. Our calculations also showed that MNST isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
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 124 percentage points since March 2017 (see the details here).
Paul Marshall of Marshall Wace
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. Recently Oregon became the first state to legalize psychedelic mushrooms which are shown to have promising results in treating depression, addiction, and PTSD in early stage academic studies. So, we are checking out this psychedelic drug stock idea right now. We go through lists like the 10 best biotech stocks to invest in to pick the next stock 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 (or at the end of this article). Keeping this in mind let’s take a peek at the new hedge fund action surrounding Monster Beverage Corp (NASDAQ:MNST).
Do Hedge Funds Think MNST Is A Good Stock To Buy Now?
Heading into the first quarter of 2021, a total of 44 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -12% from the third quarter of 2020. Below, you can check out the change in hedge fund sentiment towards MNST over the last 22 quarters. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies has the most valuable position in Monster Beverage Corp (NASDAQ:MNST), worth close to $946 million, comprising 1% of its total 13F portfolio. Sitting at the No. 2 spot is Broadwood Capital, managed by Neal C. Bradsher, which holds a $430.6 million position; the fund has 25.5% of its 13F portfolio invested in the stock. Some other members of the smart money with similar optimism consist of Cliff Asness’s AQR Capital Management, D. E. Shaw’s D E Shaw and Paul Marshall and Ian Wace’s Marshall Wace LLP. In terms of the portfolio weights assigned to each position Broadwood Capital allocated the biggest weight to Monster Beverage Corp (NASDAQ:MNST), around 25.55% of its 13F portfolio. Lakehouse Capital is also relatively very bullish on the stock, earmarking 9.49 percent of its 13F equity portfolio to MNST.
Seeing as Monster Beverage Corp (NASDAQ:MNST) has experienced declining sentiment from the smart money, we can see that there lies a certain “tier” of funds that slashed their entire stakes by the end of the fourth quarter. It’s worth mentioning that Jeff Lignelli’s Incline Global Management cut the biggest investment of the “upper crust” of funds watched by Insider Monkey, worth close to $19.6 million in stock. Robert Pitts’s fund, Steadfast Capital Management, also sold off its stock, about $11 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 6 funds by the end of the fourth quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Monster Beverage Corp (NASDAQ:MNST) but similarly valued. We will take a look at Honda Motor Co Ltd (NYSE:HMC), America Movil SAB de CV (NYSE:AMX), Aon plc (NYSE:AON), Prudential Public Limited Company (NYSE:PUK), Emerson Electric Co. (NYSE:EMR), Ambev SA (NYSE:ABEV), and Newmont Corporation (NYSE:NEM). This group of stocks’ market caps are similar to MNST’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.6 hedge funds with bullish positions and the average amount invested in these stocks was $1276 million. That figure was $2837 million in MNST’s case. Aon plc (NYSE:AON) is the most popular stock in this table. On the other hand Prudential Public Limited Company (NYSE:PUK) is the least popular one with only 2 bullish hedge fund positions. Monster Beverage Corp (NASDAQ:MNST) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MNST is 59.8. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 5.3% in 2021 through March 19th and beat the market again by 0.8 percentage points. Unfortunately MNST wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on MNST were disappointed as the stock returned -4.9% since the end of December (through 3/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Monster Beverage Corp (NASDAQ:MNST)
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Disclosure: None. This article was originally published at Insider Monkey.