In this article we will analyze whether Loews Corporation (NYSE:L) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.
Loews Corporation (NYSE:L) investors should be aware of an increase in enthusiasm from smart money in recent months. Loews Corporation (NYSE:L) was in 28 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 30. Our calculations also showed that L 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.
Ryan Tolkin, CIO of Schonfeld Strategic Advisors
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 go over the fresh hedge fund action encompassing Loews Corporation (NYSE:L).
Do Hedge Funds Think L Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 28 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from the previous quarter. The graph below displays the number of hedge funds with bullish position in L over the last 24 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Ric Dillon’s Diamond Hill Capital has the largest position in Loews Corporation (NYSE:L), worth close to $78.3 million, comprising 0.3% of its total 13F portfolio. Sitting at the No. 2 spot is Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which holds a $38.7 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining peers that are bullish consist of Dmitry Balyasny’s Balyasny Asset Management, Scott Wallace’s Wallace Capital Management and Jeremy Hosking’s Hosking Partners. In terms of the portfolio weights assigned to each position Wallace Capital Management allocated the biggest weight to Loews Corporation (NYSE:L), around 2.47% of its 13F portfolio. Levin Capital Strategies is also relatively very bullish on the stock, dishing out 0.75 percent of its 13F equity portfolio to L.
Consequently, some big names were breaking ground themselves. Renaissance Technologies, established the largest position in Loews Corporation (NYSE:L). Renaissance Technologies had $4.7 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also initiated a $3.8 million position during the quarter. The other funds with new positions in the stock are Mika Toikka’s AlphaCrest Capital Management, Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, and Cliff Asness’s AQR Capital Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Loews Corporation (NYSE:L) but similarly valued. We will take a look at Solaredge Technologies Inc (NASDAQ:SEDG), PulteGroup, Inc. (NYSE:PHM), Telefonica Brasil SA (NYSE:VIV), Ceridian HCM Holding Inc. (NYSE:CDAY), Leidos Holdings Inc (NYSE:LDOS), RH (NYSE:RH), and CenterPoint Energy, Inc. (NYSE:CNP). All of these stocks’ market caps are similar to L’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SEDG | 37 | 675586 | 5 |
| PHM | 34 | 948574 | -8 |
| VIV | 9 | 59331 | 0 |
| CDAY | 25 | 1476874 | -3 |
| LDOS | 22 | 170773 | 4 |
| RH | 54 | 4331314 | 4 |
| CNP | 20 | 287723 | -5 |
| Average | 28.7 | 1135739 | -0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.7 hedge funds with bullish positions and the average amount invested in these stocks was $1136 million. That figure was $212 million in L’s case. RH (NYSE:RH) is the most popular stock in this table. On the other hand Telefonica Brasil SA (NYSE:VIV) is the least popular one with only 9 bullish hedge fund positions. Loews Corporation (NYSE:L) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for L is 59.1. 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 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. A small number of hedge funds were also right about betting on L as the stock returned 5.6% since the end of the second quarter (through 10/15) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
