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. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of March 31st, a week after the market trough. We are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article we look at how hedge funds traded The Cooper Companies, Inc. (NYSE:COO) and determine whether the smart money was really smart about this stock.
The Cooper Companies, Inc. (NYSE:COO) has seen a decrease in enthusiasm from smart money in recent months. Our calculations also showed that COO isn't among the 30 most popular stocks among hedge funds (click for Q1 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.
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[caption id="attachment_189632" align="aligncenter" width="400"] David Harding of Winton Capital Management[/caption]
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like "the Starbucks of cannabis" to identify the next tenbagger. We go through lists like the 10 most profitable companies in the world 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. Hedge fund sentiment towards Tesla reached its all time high at the end of 2019 and Tesla shares more than tripled this year. We are trying to identify other EV revolution winners, so if you have any good ideas send us an email. With all of this in mind we're going to take a peek at the new hedge fund action surrounding The Cooper Companies, Inc. (NYSE:COO).
What does smart money think about The Cooper Companies, Inc. (NYSE:COO)?
At Q1's end, a total of 25 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -11% from the fourth quarter of 2019. By comparison, 28 hedge funds held shares or bullish call options in COO a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in The Cooper Companies, Inc. (NYSE:COO) was held by Generation Investment Management, which reported holding $498.7 million worth of stock at the end of September. It was followed by Viking Global with a $120.5 million position. Other investors bullish on the company included Citadel Investment Group, AQR Capital Management, and Marshall Wace LLP. In terms of the portfolio weights assigned to each position Generation Investment Management allocated the biggest weight to The Cooper Companies, Inc. (NYSE:COO), around 3.54% of its 13F portfolio. Motley Fool Asset Management is also relatively very bullish on the stock, dishing out 1.62 percent of its 13F equity portfolio to COO.
Due to the fact that The Cooper Companies, Inc. (NYSE:COO) has faced declining sentiment from hedge fund managers, logic holds that there exists a select few funds that elected to cut their entire stakes in the first quarter. At the top of the heap, Renaissance Technologies said goodbye to the largest investment of all the hedgies followed by Insider Monkey, worth about $11.4 million in stock. Phil Frohlich's fund, Prescott Group Capital Management, also said goodbye to its stock, about $2.6 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 3 funds in the first quarter.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as The Cooper Companies, Inc. (NYSE:COO) but similarly valued. We will take a look at Best Buy Co., Inc. (NYSE:BBY), Essex Property Trust Inc (NYSE:ESS), Fiat Chrysler Automobiles NV (NYSE:FCAU), and Equifax Inc. (NYSE:EFX). This group of stocks' market caps are similar to COO's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BBY,37,633714,12 ESS,31,368188,-2 FCAU,25,395391,2 EFX,32,1300733,0 Average,31.25,674507,3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.25 hedge funds with bullish positions and the average amount invested in these stocks was $675 million. That figure was $932 million in COO's case. Best Buy Co., Inc. (NYSE:BBY) is the most popular stock in this table. On the other hand Fiat Chrysler Automobiles NV (NYSE:FCAU) is the least popular one with only 25 bullish hedge fund positions. Compared to these stocks The Cooper Companies, Inc. (NYSE:COO) is even less popular than FCAU. Hedge funds dodged a bullet by taking a bearish stance towards COO. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.3% in 2020 through June 30th but managed to beat the market by 15.5 percentage points. Unfortunately COO wasn't nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); COO investors were disappointed as the stock returned 2.9% during the second quarter 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 so far in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.