Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Welbilt, Inc. (NYSE:WBT) based on that data and determine whether they were really smart about the stock.
Welbilt, Inc. (NYSE:WBT) has seen a decrease in activity from the world’s largest hedge funds of late. Welbilt, Inc. (NYSE:WBT) was in 38 hedge funds’ portfolios at the end of September. The all time high for this statistic is 44. Our calculations also showed that WBT isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Matthew Halbower of Pentwater Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. Now we’re going to take a glance at the fresh hedge fund action encompassing Welbilt, Inc. (NYSE:WBT).
Do Hedge Funds Think WBT Is A Good Stock To Buy Now?
At Q3’s end, a total of 38 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -14% from the previous quarter. On the other hand, there were a total of 24 hedge funds with a bullish position in WBT a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Welbilt, Inc. (NYSE:WBT) was held by Icahn Capital LP, which reported holding $259.1 million worth of stock at the end of September. It was followed by Magnetar Capital with a $148.7 million position. Other investors bullish on the company included Pentwater Capital Management, Water Island Capital, and Millennium Management. In terms of the portfolio weights assigned to each position One Fin Capital Management allocated the biggest weight to Welbilt, Inc. (NYSE:WBT), around 7% of its 13F portfolio. Havens Advisors is also relatively very bullish on the stock, setting aside 4.72 percent of its 13F equity portfolio to WBT.
Due to the fact that Welbilt, Inc. (NYSE:WBT) has experienced falling interest from the entirety of the hedge funds we track, it’s easy to see that there was a specific group of money managers that decided to sell off their entire stakes by the end of the third quarter. Interestingly, Simon Sadler’s Segantii Capital dumped the largest stake of the 750 funds tracked by Insider Monkey, worth close to $15.5 million in stock, and Matthew Mark’s Jet Capital Investors was right behind this move, as the fund cut about $13.3 million worth. These transactions are interesting, as total hedge fund interest dropped by 6 funds by the end of the third quarter.
Let’s also examine hedge fund activity in other stocks similar to Welbilt, Inc. (NYSE:WBT). We will take a look at The Simply Good Foods Company (NASDAQ:SMPL), Essential Properties Realty Trust, Inc. (NYSE:EPRT), Nektar Therapeutics (NASDAQ:NKTR), Shake Shack Inc (NYSE:SHAK), M.D.C. Holdings, Inc. (NYSE:MDC), Veracyte Inc (NASDAQ:VCYT), and Steven Madden, Ltd. (NASDAQ:SHOO). This group of stocks’ market valuations are closest to WBT’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SMPL | 19 | 187340 | 2 |
| EPRT | 10 | 14621 | 3 |
| NKTR | 23 | 272411 | 2 |
| SHAK | 25 | 284891 | 5 |
| MDC | 18 | 32800 | -4 |
| VCYT | 21 | 455716 | -1 |
| SHOO | 23 | 195874 | 5 |
| Average | 19.9 | 206236 | 1.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.9 hedge funds with bullish positions and the average amount invested in these stocks was $206 million. That figure was $1098 million in WBT’s case. Shake Shack Inc (NYSE:SHAK) is the most popular stock in this table. On the other hand Essential Properties Realty Trust, Inc. (NYSE:EPRT) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Welbilt, Inc. (NYSE:WBT) is more popular among hedge funds. Our overall hedge fund sentiment score for WBT is 74.9. 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 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 managed to beat the market by another 3.6 percentage points. Hedge funds were somewhat right about betting on WBT as the stock returned 2.2% since the end of September (through January 31st) and outperformed the top 5 hedge fund stocks but not the market. This is a rare phenomenon as top hedge fund stocks usually beat the market over the long-term.
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Disclosure: None. This article was originally published at Insider Monkey.
