We at Insider Monkey have gone over 867 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article, we look at what those funds think of Summit Materials Inc (NYSE:SUM) based on that data.
Is Summit Materials Inc (NYSE:SUM) the right pick for your portfolio? The smart money was becoming hopeful. The number of long hedge fund bets increased by 1 recently. Summit Materials Inc (NYSE:SUM) was in 21 hedge funds’ portfolios at the end of September. The all time high for this statistic is 35. Our calculations also showed that SUM isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Dmitry Balyasny of Balyasny Asset Management
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 we’re going to analyze the latest hedge fund action regarding Summit Materials Inc (NYSE:SUM).
Do Hedge Funds Think SUM Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 5% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in SUM over the last 25 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Driehaus Capital held the most valuable stake in Summit Materials Inc (NYSE:SUM), which was worth $25.5 million at the end of the third quarter. On the second spot was DG Capital Management which amassed $22.1 million worth of shares. Moore Global Investments, Citadel Investment Group, and Balyasny Asset Management 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 DG Capital Management allocated the biggest weight to Summit Materials Inc (NYSE:SUM), around 4.49% of its 13F portfolio. Harvey Partners is also relatively very bullish on the stock, dishing out 3.23 percent of its 13F equity portfolio to SUM.
With a general bullishness amongst the heavyweights, some big names have jumped into Summit Materials Inc (NYSE:SUM) headfirst. Alyeska Investment Group, managed by Anand Parekh, established the most outsized position in Summit Materials Inc (NYSE:SUM). Alyeska Investment Group had $4.3 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $1.8 million position during the quarter. The following funds were also among the new SUM investors: Mika Toikka’s AlphaCrest Capital Management, Greg Eisner’s Engineers Gate Manager, and Noam Gottesman’s GLG Partners.
Let’s check out hedge fund activity in other stocks similar to Summit Materials Inc (NYSE:SUM). These stocks are Fabrinet (NYSE:FN), MaxLinear, Inc. (NYSE:MXL), MultiPlan Corporation (NYSE:MPLN), Brighthouse Financial, Inc. (NASDAQ:BHF), Atlas Corp. (NYSE:ATCO), Investors Bancorp, Inc. (NASDAQ:ISBC), and Rent-A-Center Inc (NASDAQ:RCII). All of these stocks’ market caps are similar to SUM’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FN | 18 | 157879 | 4 |
| MXL | 24 | 155869 | 3 |
| MPLN | 27 | 298077 | 11 |
| BHF | 29 | 458644 | 3 |
| ATCO | 15 | 1453087 | -3 |
| ISBC | 20 | 73943 | 5 |
| RCII | 28 | 379238 | -1 |
| Average | 23 | 425248 | 3.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $425 million. That figure was $108 million in SUM’s case. Brighthouse Financial, Inc. (NASDAQ:BHF) is the most popular stock in this table. On the other hand Atlas Corp. (NYSE:ATCO) is the least popular one with only 15 bullish hedge fund positions. Summit Materials Inc (NYSE:SUM) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SUM is 45.4. 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. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. A small number of hedge funds were also right about betting on SUM as the stock returned 25.6% since the end of the third quarter (through 12/31) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
