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 867 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 September 30th. Hedge funds’ consensus stock picks performed spectacularly over the last 3 years, but 2022 hasn’t been kind to hedge funds. In this article we look at how hedge funds traded Floor & Decor Holdings, Inc. (NYSE:FND) and determine whether the smart money was really smart about this stock.
Floor & Decor Holdings, Inc. (NYSE:FND) shareholders have witnessed an increase in hedge fund interest in recent months. Floor & Decor Holdings, Inc. (NYSE:FND) was in 33 hedge funds’ portfolios at the end of September. The all time high for this statistic is 44. Our calculations also showed that FND isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
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. Keeping this in mind let’s check out the fresh hedge fund action surrounding Floor & Decor Holdings, Inc. (NYSE:FND).
Do Hedge Funds Think FND Is A Good Stock To Buy Now?
At Q3’s end, a total of 33 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 18% from the previous quarter. By comparison, 42 hedge funds held shares or bullish call options in FND a year ago. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
Among these funds, Abdiel Capital Advisors held the most valuable stake in Floor & Decor Holdings, Inc. (NYSE:FND), which was worth $602 million at the end of the third quarter. On the second spot was Two Creeks Capital Management which amassed $290.5 million worth of shares. Berkshire Hathaway, Melvin Capital Management, and Park Presidio 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 Two Creeks Capital Management allocated the biggest weight to Floor & Decor Holdings, Inc. (NYSE:FND), around 15.38% of its 13F portfolio. Abdiel Capital Advisors is also relatively very bullish on the stock, earmarking 14.82 percent of its 13F equity portfolio to FND.
Consequently, specific money managers were breaking ground themselves. Berkshire Hathaway, managed by Warren Buffett, assembled the biggest position in Floor & Decor Holdings, Inc. (NYSE:FND). Berkshire Hathaway had $98.7 million invested in the company at the end of the quarter. Gabriel Plotkin’s Melvin Capital Management also initiated a $64.6 million position during the quarter. The other funds with brand new FND positions are John Kim’s Night Owl Capital Management, Jinghua Yan’s TwinBeech Capital, and Greg Eisner’s Engineers Gate Manager.
Let’s check out hedge fund activity in other stocks similar to Floor & Decor Holdings, Inc. (NYSE:FND). We will take a look at DENTSPLY SIRONA Inc. (NASDAQ:XRAY), Korea Electric Power Corporation (NYSE:KEP), AMERCO (NASDAQ:UHAL), Guardant Health, Inc. (NASDAQ:GH), Agnico Eagle Mines Limited (NYSE:AEM), Campbell Soup Company (NYSE:CPB), and LPL Financial Holdings Inc (NASDAQ:LPLA). This group of stocks’ market valuations are similar to FND’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| XRAY | 35 | 745567 | 0 |
| KEP | 3 | 22067 | -1 |
| UHAL | 25 | 900713 | 4 |
| GH | 31 | 1515303 | -18 |
| AEM | 33 | 415664 | 4 |
| CPB | 29 | 443269 | 2 |
| LPLA | 37 | 1690118 | -11 |
| Average | 27.6 | 818957 | -2.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.6 hedge funds with bullish positions and the average amount invested in these stocks was $819 million. That figure was $1418 million in FND’s case. LPL Financial Holdings Inc (NASDAQ:LPLA) is the most popular stock in this table. On the other hand Korea Electric Power Corporation (NYSE:KEP) is the least popular one with only 3 bullish hedge fund positions. Floor & Decor Holdings, Inc. (NYSE:FND) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FND is 76.6. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 beat the market again by 3.6 percentage points. Unfortunately, FND wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on FND were disappointed as the stock returned -10% since the end of September (through 1/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as all of these stocks already outperformed the market since 2019.
Follow Floor & Decor Holdings Inc. (NYSE:FND)
Follow Floor & Decor Holdings Inc. (NYSE:FND)
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Disclosure: None. This article was originally published at Insider Monkey.
