We at Insider Monkey have gone over 817 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article, we look at what those funds think of Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) based on that data.
Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) has seen an increase in hedge fund sentiment in recent months. Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) was in 6 hedge funds’ portfolios at the end of September. The all time high for this statistics is 13. Our calculations also showed that KOF isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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. With all of this in mind let’s view the new hedge fund action surrounding Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF).
What have hedge funds been doing with Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF)?
At the end of the third quarter, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, a change of 20% from one quarter earlier. On the other hand, there were a total of 13 hedge funds with a bullish position in KOF a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Bill & Melinda Gates Foundation Trust held the most valuable stake in Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF), which was worth $253.1 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $75.6 million worth of shares. DPM Capital, AQR Capital Management, and Arrowstreet Capital 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 DPM Capital allocated the biggest weight to Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF), around 1.2% of its 13F portfolio. Bill & Melinda Gates Foundation Trust is also relatively very bullish on the stock, setting aside 1.15 percent of its 13F equity portfolio to KOF.
As industrywide interest jumped, specific money managers have jumped into Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) headfirst. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, assembled the most valuable position in Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF). Arrowstreet Capital had $0.9 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also initiated a $0.3 million position during the quarter.
Let’s now review hedge fund activity in other stocks similar to Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF). These stocks are Farfetch Limited (NYSE:FTCH), GDS Holdings Limited (NASDAQ:GDS), Sociedad Química y Minera de Chile S.A. (NYSE:SQM), The Scotts Miracle-Gro Company (NYSE:SMG), A. O. Smith Corporation (NYSE:AOS), Universal Display Corporation (NASDAQ:OLED), and Globe Life Inc. (NYSE:GL). This group of stocks’ market valuations are similar to KOF’s market valuation.
|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 30.1 hedge funds with bullish positions and the average amount invested in these stocks was $805 million. That figure was $333 million in KOF’s case. GDS Holdings Limited (NASDAQ:GDS) is the most popular stock in this table. On the other hand Sociedad Química y Minera de Chile S.A. (NYSE:SQM) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) is even less popular than SQM. Our overall hedge fund sentiment score for KOF is 19.8. 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. Hedge funds clearly dropped the ball on KOF as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on KOF as the stock returned 14% since Q3 (through November 27th) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.