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 Lockheed Martin Corporation (NYSE:LMT).
Lockheed Martin Corporation (NYSE:LMT) investors should be aware of a decrease in hedge fund interest lately. Lockheed Martin Corporation (NYSE:LMT) was in 51 hedge funds’ portfolios at the end of September. The all time high for this statistic is 58. Our calculations also showed that LMT 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 take a gander at the key hedge fund action regarding Lockheed Martin Corporation (NYSE:LMT).
Michael Burry of Scion Asset Management
Do Hedge Funds Think LMT Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 51 of the hedge funds tracked by Insider Monkey were long this stock, a change of -12% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards LMT over the last 25 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
More specifically, Citadel Investment Group was the largest shareholder of Lockheed Martin Corporation (NYSE:LMT), with a stake worth $466.9 million reported as of the end of September. Trailing Citadel Investment Group was Millennium Management, which amassed a stake valued at $193.8 million. Yacktman Asset Management, ARK Investment Management, and D E Shaw 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 Scion Asset Management allocated the biggest weight to Lockheed Martin Corporation (NYSE:LMT), around 24.82% of its 13F portfolio. Heard Capital is also relatively very bullish on the stock, dishing out 7.03 percent of its 13F equity portfolio to LMT.
Because Lockheed Martin Corporation (NYSE:LMT) has experienced a decline in interest from the aggregate hedge fund industry, it’s safe to say that there is a sect of money managers who were dropping their entire stakes in the third quarter. Interestingly, Paul Tudor Jones’s Tudor Investment Corp cut the largest position of the “upper crust” of funds monitored by Insider Monkey, valued at about $10.1 million in stock, and Alexander Mitchell’s Scopus Asset Management was right behind this move, as the fund cut about $6.8 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 7 funds in the third quarter.
Let’s go over hedge fund activity in other stocks similar to Lockheed Martin Corporation (NYSE:LMT). These stocks are Infosys Limited (NYSE:INFY), Prologis Inc (NYSE:PLD), Zoetis Inc (NYSE:ZTS), BP plc (NYSE:BP), Snowflake Inc (NYSE:SNOW), Anthem Inc (NYSE:ANTM), and ConocoPhillips (NYSE:COP). This group of stocks’ market values resemble LMT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| INFY | 29 | 2473668 | 7 |
| PLD | 32 | 483464 | -8 |
| ZTS | 58 | 2713394 | 0 |
| BP | 29 | 1053236 | -1 |
| SNOW | 73 | 14569929 | 3 |
| ANTM | 59 | 4585560 | -8 |
| COP | 49 | 1371142 | -1 |
| Average | 47 | 3892913 | -1.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 47 hedge funds with bullish positions and the average amount invested in these stocks was $3893 million. That figure was $1284 million in LMT’s case. Snowflake Inc (NYSE:SNOW) is the most popular stock in this table. On the other hand Infosys Limited (NYSE:INFY) is the least popular one with only 29 bullish hedge fund positions. Lockheed Martin Corporation (NYSE:LMT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for LMT is 49.4. 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. 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately LMT wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on LMT were disappointed as the stock returned -2.6% since the end of September (through 11/30) 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 many of these stocks already outperformed the market since 2019.
Follow Lockheed Martin Corp (NYSE:LMT)
Follow Lockheed Martin Corp (NYSE:LMT)
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Disclosure: None. This article was originally published at Insider Monkey.
