Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Celsius Holdings, Inc. (NASDAQ:CELH).
Celsius Holdings, Inc. (NASDAQ:CELH) shareholders have witnessed an increase in enthusiasm from smart money lately. Our calculations also showed that CELH 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we're going to go over the recent hedge fund action regarding Celsius Holdings, Inc. (NASDAQ:CELH).
What does smart money think about Celsius Holdings, Inc. (NASDAQ:CELH)?
At Q1's end, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a change of 14% from the previous quarter. On the other hand, there were a total of 2 hedge funds with a bullish position in CELH a year ago. With hedge funds' positions undergoing their usual ebb and flow, there exists an "upper tier" of noteworthy hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
The largest stake in Celsius Holdings, Inc. (NASDAQ:CELH) was held by Cowbird Capital, which reported holding $3.8 million worth of stock at the end of September. It was followed by Millennium Management with a $1.9 million position. Other investors bullish on the company included Voss Capital, Renaissance Technologies, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Cowbird Capital allocated the biggest weight to Celsius Holdings, Inc. (NASDAQ:CELH), around 3.83% of its 13F portfolio. Voss Capital is also relatively very bullish on the stock, setting aside 1.33 percent of its 13F equity portfolio to CELH.
As aggregate interest increased, key money managers were leading the bulls' herd. Cowbird Capital, managed by Scott Coulter, assembled the largest position in Celsius Holdings, Inc. (NASDAQ:CELH). Cowbird Capital had $3.8 million invested in the company at the end of the quarter. Ken Griffin's Citadel Investment Group also made a $0.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Noam Gottesman's GLG Partners and Cliff Asness's AQR Capital Management.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Celsius Holdings, Inc. (NASDAQ:CELH) but similarly valued. These stocks are Avid Technology, Inc. (NASDAQ:AVID), Ducommun Incorporated (NYSE:DCO), Matador Resources Co (NYSE:MTDR), and CNB Financial Corporation (NASDAQ:CCNE). This group of stocks' market values are similar to CELH's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AVID,15,71812,2 DCO,11,38961,0 MTDR,17,44417,-6 CCNE,6,20463,0 Average,12.25,43913,-1 [/table]
As you can see these stocks had an average of 12.25 hedge funds with bullish positions and the average amount invested in these stocks was $44 million. That figure was $8 million in CELH's case. Matador Resources Co (NYSE:MTDR) is the most popular stock in this table. On the other hand CNB Financial Corporation (NASDAQ:CCNE) is the least popular one with only 6 bullish hedge fund positions. Celsius Holdings, Inc. (NASDAQ:CELH) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.2% in 2020 through June 17th and still beat the market by 14.8 percentage points. A small number of hedge funds were also right about betting on CELH as the stock returned 124.9% during the second quarter and outperformed the market by an even larger margin.
