The Insider Monkey team has completed processing the quarterly 13F filings for the June quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Valmont Industries, Inc. (NYSE:VMI).
Valmont Industries, Inc. (NYSE:VMI) was in 25 hedge funds’ portfolios at the end of June. The all time high for this statistic is 28. VMI investors should pay attention to an increase in support from the world’s most elite money managers in recent months. There were 23 hedge funds in our database with VMI holdings at the end of March. Our calculations also showed that VMI isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Chuck Royce of Royce & Associates
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s take a gander at the recent hedge fund action surrounding Valmont Industries, Inc. (NYSE:VMI).
Do Hedge Funds Think VMI Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 9% from one quarter earlier. On the other hand, there were a total of 27 hedge funds with a bullish position in VMI a year ago. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
More specifically, Impax Asset Management was the largest shareholder of Valmont Industries, Inc. (NYSE:VMI), with a stake worth $177.1 million reported as of the end of June. Trailing Impax Asset Management was Royce & Associates, which amassed a stake valued at $78.5 million. Nitorum Capital, Greenhouse Funds, and GAMCO Investors 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 ACK Asset Management allocated the biggest weight to Valmont Industries, Inc. (NYSE:VMI), around 4.81% of its 13F portfolio. Harvey Partners is also relatively very bullish on the stock, designating 2.86 percent of its 13F equity portfolio to VMI.
As one would reasonably expect, some big names have been driving this bullishness. Renaissance Technologies, created the largest position in Valmont Industries, Inc. (NYSE:VMI). Renaissance Technologies had $4.1 million invested in the company at the end of the quarter. Mika Toikka’s AlphaCrest Capital Management also initiated a $1.4 million position during the quarter. The other funds with brand new VMI positions are Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors and Matthew Hulsizer’s PEAK6 Capital Management.
Let’s now review hedge fund activity in other stocks similar to Valmont Industries, Inc. (NYSE:VMI). These stocks are 3D Systems Corporation (NYSE:DDD), Rayonier Inc. (NYSE:RYN), Nomad Foods Limited (NYSE:NOMD), Stantec Inc. (NYSE:STN), Power Integrations Inc (NASDAQ:POWI), Revolve Group, Inc. (NYSE:RVLV), and Spirit AeroSystems Holdings, Inc. (NYSE:SPR). This group of stocks’ market caps resemble VMI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DDD | 20 | 511358 | 4 |
| RYN | 13 | 392663 | -5 |
| NOMD | 26 | 298284 | 1 |
| STN | 10 | 46456 | 1 |
| POWI | 21 | 138778 | 3 |
| RVLV | 22 | 211498 | -7 |
| SPR | 35 | 853789 | -9 |
| Average | 21 | 350404 | -1.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $350 million. That figure was $404 million in VMI’s case. Spirit AeroSystems Holdings, Inc. (NYSE:SPR) is the most popular stock in this table. On the other hand Stantec Inc. (NYSE:STN) is the least popular one with only 10 bullish hedge fund positions. Valmont Industries, Inc. (NYSE:VMI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VMI is 63.8. 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 24% in 2021 through October 22nd and beat the market again by 1.6 percentage points. Unfortunately VMI wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on VMI were disappointed as the stock returned -1.7% since the end of June (through 10/22) 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 Valmont Industries Inc (NYSE:VMI)
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Disclosure: None. This article was originally published at Insider Monkey.
