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Is Sodastream International Ltd (SODA) A Good Stock To Buy?

Insider Monkey has processed numerous 13F filings of hedge funds and famous investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds and investors’ positions as of the end of the third quarter. You can find write-ups 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 and analyze what the smart money thinks of Sodastream International Ltd (NASDAQ:SODA) based on that data.

Sodastream International Ltd was in 11 hedge funds’ portfolios at the end of the third quarter of 2015. SODA investors should pay attention to an increase in hedge fund interest of late. There were 9 hedge funds in our database with SODA holdings at the end of the previous quarter. At the end of this article we will also compare SODA to other stocks, including Cryolife Inc (NYSE:CRY), Rubicon Minerals Corp. (USA) (NYSEAMEX:RBY), and Arctic Cat Inc (NASDAQ:ACAT) to get a better sense of its popularity.

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To most shareholders, hedge funds are perceived as unimportant, outdated investment vehicles of years past. While there are more than 8000 funds in operation at present, Our experts hone in on the masters of this group, around 700 funds. Most estimates calculate that this group of people preside over the lion’s share of the smart money’s total capital, and by paying attention to their inimitable equity investments, Insider Monkey has figured out several investment strategies that have historically beaten the market. Insider Monkey’s small-cap hedge fund strategy outrun the S&P 500 index by 12 percentage points annually for a decade in their back tests.

Now, let’s go over the recent action surrounding Sodastream International Ltd (NASDAQ:SODA).

Hedge fund activity in Sodastream International Ltd (NASDAQ:SODA)

At the Q3’s end, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 22% from the previous quarter. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Wilmot B. Harkey and Daniel Mack’s Nantahala Capital Management has the biggest position in Sodastream International Ltd (NASDAQ:SODA), worth close to $15.3 million, comprising 2.1% of its total 13F portfolio. The second most bullish fund is Dmitry Balyasny’s Balyasny Asset Management, with a $6.6 million call position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers that are bullish consist of Jim Simons’ Renaissance Technologies, and Whitney Tilson’s T2 Partners.

As one would reasonably expect, key hedge funds were breaking ground themselves. Balyasny Asset Management assembled the most valuable call position in Sodastream International Ltd (NASDAQ:SODA). Moreover, Balyasny Asset Management also initiated a $0.4 million position during the quarter. The only other fund with a brand new SODA position is Joseph Mathias’s Concourse Capital Management.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Sodastream International Ltd (NASDAQ:SODA) but similarly valued. These stocks are Cryolife Inc (NYSE:CRY), Rubicon Minerals Corp. (USA) (NYSEAMEX:RBY), Arctic Cat Inc (NASDAQ:ACAT), and Pace Holdings Corp (NASDAQ:PACE). This group of stocks’ market valuations are similar to SODA’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CRY 8 18411 0
RBY 4 27783 -3
ACAT 7 18702 -2
PACE 18 166875 18

As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $58 million. That figure was $39 million in SODA’s case. Pace Holdings Corp (NASDAQ:PACE) is the most popular stock in this table. On the other hand Rubicon Minerals Corp. (USA) (NYSEAMEX:RBY) is the least popular one with only 4 bullish hedge fund positions. Sodastream International Ltd (NASDAQ:SODA) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard PACE might be a better candidate to consider a long position.

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