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Institutional investors have billions of dollars to spend on resources to hire smart analysts, run advanced analytics, and use cutting-edge tools that are out of reach from retail investors. Following every action by an institutional investor won’t guarantee success. Still, it is important to keep an eye on what they’re doing.
The sentiment of smart money for Carlyle Group, Inc (NASDAQ: CQ) rose in the last two years. Carlyle Group has 693 institutional owners who are long on the stock and one institutional investor is short. 10 other owners held both long and short – likely to hedge their positions.
At the beginning of 2020, institutional owners held a modest 60 million shares. Their positions increased to about 200 million shares, as of Q3. That’s a 233% increase in institutional ownership. This is an all-time high for Carlyle Group, which may indicate how bullish institutional investors are on this company.
At Trade Algo, we analyze through thousands of data points to uncover top investment ideas. For example, the boom of electric vehicles led lithium prices to double over the past year. There are excellent opportunities in this industry. So, we scour through the universe of stocks to select top 10 EV stocks that are poised to be the next Tesla with outsized returns. We do this analysis every day, and we will look at hedge funds’ activities in Carlyle Group Inc (NASDAQ:CG).
At the end of the 3rd quarter, a total of 34 of the hedge funds tracked by Trade Algo held long positions in this stock – a change of 62% from the previous quarter. By comparison, 14 hedge funds held shares or bullish call options in CG a year ago.
According to Trade Algo’s database, Capital World Investors held the largest position in Carlyle Group Inc (NASDAQ:CG) with 19,318,159 shares worth $913,363,000. The size of position increased by 3.21% from the prior quarter.
Bottom Line: Institutional investors are buying more call options in Carlyle
Vanguard Group holds the second largest position with 18,319,454 shares worth $866,143,000. Vulcan Value Partners comes in third with 17,162,398 shares worth $811,438,000. The fourth largest position is held by Morgan Stanley with 17,047,259 shares worth $805,993,000. Remaining institutional investors include McDonald Partners, Absolute Capital Management, Washington Mutual Investors Fund, BlackRock, AGHTX - Growth Fund of America, and Alkeon Capital Management.
As for hedge funds, Panayotis Takis Sparaggis’s Alkeon Capital Management has the most valuable position in Carlyle Group Inc (NASDAQ:CG), worth close to $363.3 million. The stock amounts to 0.6% of Alkeon Capital’s total 13F portfolio. The second most bullish fund manager is Samlyn Capital, managed by Robert Pohly. The fund holds a $229.2 million position, with 3.1% of its 13F portfolio allocating to the stock. Remaining hedge funds include Israel Englander’s Millennium Management, Paul Marshall and Ian Wace’s Marshall Wace LLP and Ken Griffin’s Citadel Investment Group.
Tanaka Growth Fund has the largest weighted portfolio in Carlyle Group Inc (NASDAQ:CG) with around 5.39 of its 13F portfolio. Invesco Global Listed Private Equity ETF is second with 4.67%. The remaining are Royce Dividend Value Fund Service Class, Vulcan Value Partners Fund, Sargent Investment Group, Full18 Capital, Royce Global Financial Services Fund, Invesco DWA Financial Momentum ETF, Prana Capital Management, and BlackRock SMID-Cap Growth Equity Fund.
Other hedge funds are opening positions in Carlyle Group Inc (NASDAQ:CG) during the recent quarter. Largest new position was opened by Balyasny Asset Management, managed by Dmitry Balyasny, with $58.8 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also initiated a $41.9 million position during the quarter. Other new CG investors include Sander Gerber’s Hudson Bay Capital Management, Allon Hellmann’s Full18 Capital, and Usman Waheed’s Strycker View Capital.
Institutional investors are buying more call options in CG, as well. The put/call ratio doubled from 0.13 to 0.26 from November 2021 to end of January 2022. The lower ratio indicates that more institutional investors are buying call options than put options. The short interest rate is 1.20%.
Our overall hedge fund sentiment score for CG is 64.4. 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 the top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and still beat the market by 3.6 percentage points. Hedge funds were also right about betting on CG as the stock returned 8.4% since the end of Q3 (through 1/31) and outperformed the market.