At Insider Monkey, we pore over the filings of nearly 866 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of March 31st. In this article, we will use that wealth of knowledge to determine whether or not TechnipFMC plc (NYSE:FTI) makes for a good investment right now.
TechnipFMC plc (NYSE:FTI) was in 25 hedge funds’ portfolios at the end of March. The all time high for this statistic is 42. FTI investors should pay attention to a decrease in enthusiasm from smart money recently. There were 35 hedge funds in our database with FTI holdings at the end of December. Our calculations also showed that FTI isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
To the average investor there are numerous signals market participants have at their disposal to size up publicly traded companies. Some of the less known signals are hedge fund and insider trading interest. We have shown that, historically, those who follow the best picks of the elite fund managers can outperform the S&P 500 by a significant margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Jonathan Barrett of Luminus Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery 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. With all of this in mind let’s take a peek at the new hedge fund action surrounding TechnipFMC plc (NYSE:FTI).
Do Hedge Funds Think FTI Is A Good Stock To Buy Now?
At first quarter’s end, a total of 25 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -29% from the previous quarter. By comparison, 29 hedge funds held shares or bullish call options in FTI a year ago. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
Among these funds, Pzena Investment Management held the most valuable stake in TechnipFMC plc (NYSE:FTI), which was worth $177.3 million at the end of the fourth quarter. On the second spot was Millennium Management which amassed $37.5 million worth of shares. Laurion Capital Management, Two Sigma Advisors, and Renaissance Technologies 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 SIR Capital Management allocated the biggest weight to TechnipFMC plc (NYSE:FTI), around 2.42% of its 13F portfolio. Pzena Investment Management is also relatively very bullish on the stock, designating 0.72 percent of its 13F equity portfolio to FTI.
Due to the fact that TechnipFMC plc (NYSE:FTI) has witnessed falling interest from hedge fund managers, it’s easy to see that there was a specific group of money managers that decided to sell off their entire stakes last quarter. Interestingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dumped the largest position of the 750 funds watched by Insider Monkey, valued at about $44.5 million in stock, and Jacob Mitchell’s Antipodes Partners was right behind this move, as the fund said goodbye to about $31.4 million worth. These moves are important to note, as aggregate hedge fund interest fell by 10 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks similar to TechnipFMC plc (NYSE:FTI). We will take a look at Rush Street Interactive, Inc. (NYSE:RSI), LiveRamp Holdings, Inc. (NYSE:RAMP), First Majestic Silver Corp (NYSE:AG), White Mountains Insurance Group Ltd (NYSE:WTM), Intercorp Financial Services Inc. (NYSE:IFS), Apellis Pharmaceuticals, Inc. (NASDAQ:APLS), and Meritage Homes Corp (NYSE:MTH). This group of stocks’ market valuations are similar to FTI’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RSI | 17 | 116342 | -9 |
| RAMP | 26 | 300365 | 2 |
| AG | 15 | 54788 | 3 |
| WTM | 19 | 304951 | 3 |
| IFS | 5 | 35452 | -1 |
| APLS | 34 | 696117 | -1 |
| MTH | 23 | 335864 | -7 |
| Average | 19.9 | 263411 | -1.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.9 hedge funds with bullish positions and the average amount invested in these stocks was $263 million. That figure was $410 million in FTI’s case. Apellis Pharmaceuticals, Inc. (NASDAQ:APLS) is the most popular stock in this table. On the other hand Intercorp Financial Services Inc. (NYSE:IFS) is the least popular one with only 5 bullish hedge fund positions. TechnipFMC plc (NYSE:FTI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FTI is 47.3. 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% in 2021 through July 9th and still beat the market by 6.7 percentage points. Hedge funds were also right about betting on FTI, though not to the same extent, as the stock returned 11.9% since Q1 (through July 9th) and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.
