Were Hedge Funds Right About Piling Into Crown Holdings (CCK)?

Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards Crown Holdings, Inc. (NYSE:CCK) changed recently.

Crown Holdings, Inc. (NYSE:CCK) investors should be aware of an increase in support from the world’s most elite money managers in recent months. Crown Holdings, Inc. (NYSE:CCK) was in 63 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic was previously 58. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 47 hedge funds in our database with CCK holdings at the end of September. Our calculations also showed that CCK 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. 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 124 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

Matthew Hulsizer PEAK6 Capital

Matthew Hulsizer of PEAK6 Capital

At Insider Monkey we leave no stone unturned when looking for 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 hydrogen fuel cell 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 let’s take a look at the fresh hedge fund action encompassing Crown Holdings, Inc. (NYSE:CCK).

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

At the end of the fourth quarter, a total of 63 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 34% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CCK over the last 22 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is CCK A Good Stock To Buy?

More specifically, Lyrical Asset Management was the largest shareholder of Crown Holdings, Inc. (NYSE:CCK), with a stake worth $339.8 million reported as of the end of December. Trailing Lyrical Asset Management was Maverick Capital, which amassed a stake valued at $152.1 million. Southpoint Capital Advisors, Rivulet Capital, and Citadel Investment Group 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 SAYA Management allocated the biggest weight to Crown Holdings, Inc. (NYSE:CCK), around 17.37% of its 13F portfolio. Engle Capital is also relatively very bullish on the stock, earmarking 13.03 percent of its 13F equity portfolio to CCK.

As industrywide interest jumped, key hedge funds were leading the bulls’ herd. TOMS Capital, managed by Benjamin Pass, initiated the biggest position in Crown Holdings, Inc. (NYSE:CCK). TOMS Capital had $80.4 million invested in the company at the end of the quarter. Ben Jacobs’s Anomaly Capital Management also made a $36.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Eli Cohen’s Crescent Park Management, Guy Shahar’s DSAM Partners, and Brad Farber’s Atika Capital.

Let’s go over 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 Brookfield Property Partners LP (NYSE:BPY), Brown & Brown, Inc. (NYSE:BRO), ON Semiconductor Corporation (NASDAQ:ON), Sarepta Therapeutics Inc (NASDAQ:SRPT), Cable One Inc (NYSE:CABO), Penn National Gaming, Inc (NASDAQ:PENN), and Omnicom Group Inc. (NYSE:OMC). This group of stocks’ market caps are similar to CCK’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BPY 9 26137 1
BRO 29 931431 0
ON 45 1377409 16
SRPT 37 978493 2
CABO 17 827605 -6
PENN 41 1324598 -4
OMC 34 546941 0
Average 30.3 858945 1.3

View table here if you experience formatting issues.

As you can see these stocks had an average of 30.3 hedge funds with bullish positions and the average amount invested in these stocks was $859 million. That figure was $2030 million in CCK’s case. ON Semiconductor Corporation (NASDAQ:ON) is the most popular stock in this table. On the other hand Brookfield Property Partners LP (NYSE:BPY) is the least popular one with only 9 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 90. 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 10 most popular stocks among hedge funds returned 90.7% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 35 percentage points. These stocks gained 13.6% in 2021 through April 30th and still beat the market by 1.6 percentage points. Unfortunately CCK wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on CCK were disappointed as the stock returned 9.8% since the end of the fourth quarter (through 4/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 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.