The Insider Monkey team has completed processing the quarterly 13F filings for the December quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Sealed Air Corporation (NYSE:SEE).
Is SEE stock a buy? The best stock pickers were betting on the stock. The number of long hedge fund positions went up by 1 lately. Sealed Air Corporation (NYSE:SEE) was in 32 hedge funds’ portfolios at the end of December. The all time high for this statistic is 49. Our calculations also showed that SEE 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 has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 124 percentage points since March 2017 (see the details here).
Michael Lowenstein of Kensico Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. 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. Now let’s take a glance at the new hedge fund action surrounding Sealed Air Corporation (NYSE:SEE).
Do Hedge Funds Think SEE Is A Good Stock To Buy Now?
Heading into the first quarter of 2021, a total of 32 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 3% from one quarter earlier. On the other hand, there were a total of 30 hedge funds with a bullish position in SEE a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
Among these funds, Rivulet Capital held the most valuable stake in Sealed Air Corporation (NYSE:SEE), which was worth $311.7 million at the end of the fourth quarter. On the second spot was Kensico Capital which amassed $226.1 million worth of shares. Nitorum Capital, Millennium Management, and Renaissance Technologies 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 Rivulet Capital allocated the biggest weight to Sealed Air Corporation (NYSE:SEE), around 15.43% of its 13F portfolio. Kensico Capital is also relatively very bullish on the stock, setting aside 5.25 percent of its 13F equity portfolio to SEE.
As aggregate interest increased, key hedge funds have jumped into Sealed Air Corporation (NYSE:SEE) headfirst. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, established the most outsized position in Sealed Air Corporation (NYSE:SEE). Marshall Wace LLP had $2.5 million invested in the company at the end of the quarter. Greg Poole’s Echo Street Capital Management also made a $0.5 million investment in the stock during the quarter. The following funds were also among the new SEE investors: David Harding’s Winton Capital Management, Jinghua Yan’s TwinBeech Capital, and Brandon Haley’s Holocene Advisors.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Sealed Air Corporation (NYSE:SEE) but similarly valued. We will take a look at Knight-Swift Transportation Holdings Inc. (NYSE:KNX), Novavax, Inc. (NASDAQ:NVAX), McAfee Corp. (NASDAQ:MCFE), Syneos Health, Inc. (NASDAQ:SYNH), First Horizon National Corporation (NYSE:FHN), Donaldson Company, Inc. (NYSE:DCI), and Redfin Corporation (NASDAQ:RDFN). This group of stocks’ market values resemble SEE’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| KNX | 34 | 429122 | -18 |
| NVAX | 37 | 1004250 | 1 |
| MCFE | 20 | 257825 | 20 |
| SYNH | 29 | 592871 | -11 |
| FHN | 30 | 403346 | 0 |
| DCI | 26 | 311896 | -4 |
| RDFN | 21 | 209673 | -7 |
| Average | 28.1 | 458426 | -2.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.1 hedge funds with bullish positions and the average amount invested in these stocks was $458 million. That figure was $901 million in SEE’s case. Novavax, Inc. (NASDAQ:NVAX) is the most popular stock in this table. On the other hand McAfee Corp. (NASDAQ:MCFE) is the least popular one with only 20 bullish hedge fund positions. Sealed Air Corporation (NYSE:SEE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SEE is 60.9. 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 12.2% in 2021 through April 12th and beat the market again by 1.5 percentage points. Unfortunately SEE wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on SEE were disappointed as the stock returned 3.7% since the end of December (through 4/12) 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.
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Disclosure: None. This article was originally published at Insider Monkey.
