After several tireless days we have finished crunching the numbers from the more than 700 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Lennox International Inc. (NYSE:LII).
Is Lennox International Inc. (NYSE:LII) a first-rate investment now? Investors who are in the know are taking a bearish view. The number of long hedge fund positions went down by 5 recently. LII was in 20 hedge funds’ portfolios at the end of September. There were 25 hedge funds in our database with LII holdings at the end of the previous quarter. At the end of this article we will also compare LII to other stocks including Helmerich & Payne, Inc. (NYSE:HP), Genpact Limited (NYSE:G), and ADT Corp (NYSE:ADT) to get a better sense of its popularity.
Follow Lennox International Inc (NYSE:LII)
Follow Lennox International Inc (NYSE:LII)
Today there are a large number of metrics shareholders can use to value stocks. Some of the most useful metrics are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the best picks of the best fund managers can outperform the S&P 500 by a healthy amount (see the details here).
Keeping this in mind, let’s review the new action surrounding Lennox International Inc. (NYSE:LII).
How are hedge funds trading Lennox International Inc. (NYSE:LII)?
Heading into Q4, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -20% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Alyeska Investment Group, managed by Anand Parekh, holds the biggest position in Lennox International Inc. (NYSE:LII). Alyeska Investment Group has a $42.3 million position in the stock, comprising 0.5% of its 13F portfolio. The second largest stake is held by Cliff Asness of AQR Capital Management, with a $16.4 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish include John Croghan and Richard Fradin’s Rail-Splitter Capital Management, Jacob Gottlieb’s Visium Asset Management and Paul Tudor Jones’s Tudor Investment Corp.
Since Lennox International Inc. (NYSE:LII) has faced a declination in interest from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of hedge funds that decided to sell off their positions entirely in the third quarter. Interestingly, Alexander Mitchell’s Scopus Asset Management sold off the biggest position of all the hedgies followed by Insider Monkey, comprising close to $38.5 million in stock. Ken Griffin’s fund, Citadel Investment Group, also dropped its stock, about $28.4 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 5 funds in the third quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Lennox International Inc. (NYSE:LII) but similarly valued. These stocks are Helmerich & Payne, Inc. (NYSE:HP), Genpact Limited (NYSE:G), ADT Corp (NYSE:ADT), and FireEye Inc (NASDAQ:FEYE). All of these stocks’ market caps are closest to LII’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HP | 27 | 368613 | 3 |
| G | 17 | 375488 | -5 |
| ADT | 22 | 210500 | -6 |
| FEYE | 37 | 383976 | 2 |
As you can see these stocks had an average of 25.75 hedge funds with bullish positions and the average amount invested in these stocks was $335 million. That figure was $130 million in LII’s case. FireEye Inc (NASDAQ:FEYE) is the most popular stock in this table. On the other hand Genpact Limited (NYSE:G) is the least popular one with only 17 bullish hedge fund positions. Lennox International Inc. (NYSE:LII) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard FEYE might be a better candidate to consider a long position.
