Insider Monkey has processed numerous 13F filings of hedge funds and famous investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds and investors’ positions as of the end of the third quarter. You can find write-ups about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves and analyze what the smart money thinks of Illinois Tool Works Inc. (NYSE:ITW) based on that data.
Is Illinois Tool Works Inc. (NYSE:ITW) a safe investment right now? Investors who are in the know are taking a bearish view. The number of long hedge fund positions went down by 7 lately. ITW was in 31 hedge funds’ portfolios at the end of the third quarter of 2015. There were 38 hedge funds in our database with ITW holdings at the end of the previous quarter. At the end of this article we will also compare ITW to other stocks, including Liberty Global PLC LiLAC Class C (NASDAQ:LILAK), Valero Energy Corporation (NYSE:VLO), and eBay Inc (NASDAQ:EBAY) to get a better sense of its popularity.
Follow Illinois Tool Works Inc (NYSE:ITW)
Follow Illinois Tool Works Inc (NYSE:ITW)
In today’s marketplace there are numerous indicators market participants use to assess publicly traded companies. A couple of the most useful indicators are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the top picks of the best investment managers can trounce the broader indices by a superb amount (see the details here).
With all of this in mind, let’s take a look at the recent action surrounding Illinois Tool Works Inc. (NYSE:ITW).
How are hedge funds trading Illinois Tool Works Inc. (NYSE:ITW)?
At Q3’s end, a total of 31 of the hedge funds tracked by Insider Monkey were long this stock, a drop of 18% from the second quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Ken Griffin’s Citadel Investment Group has the largest position in Illinois Tool Works Inc. (NYSE:ITW), worth close to $315.3 million, comprising 0.3% of its total 13F portfolio. Sitting at the No. 2 spot is David Harding of Winton Capital Management, with a $70.8 million position; 0.6% of its 13F portfolio is allocated to the stock. Some other members of the smart money that hold long positions comprise Anand Parekh’s Alyeska Investment Group, John Overdeck and David Siegel’s Two Sigma Advisors and Israel Englander’s Millennium Management.
Since Illinois Tool Works Inc. (NYSE:ITW) has experienced falling interest from the entirety of the hedge funds we track, we can see that there were a few funds that decided to sell off their positions entirely last quarter. Intriguingly, Dmitry Balyasny’s Balyasny Asset Management said goodbye to the largest stake of all the hedgies followed by Insider Monkey, worth an estimated $65.9 million in call options, and Matthew Mark’s Jet Capital Investors was right behind this move, as the fund dropped about $45.9 million worth of call options. These bearish behaviors are interesting, as total hedge fund interest dropped by 7 funds last quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Illinois Tool Works Inc. (NYSE:ITW) but similarly valued. We will take a look at Liberty Global PLC LiLAC Class C (NASDAQ:LILAK), Valero Energy Corporation (NYSE:VLO), eBay Inc (NASDAQ:EBAY), and Syngenta AG (ADR) (NYSE:SYT). This group of stocks’ market caps are closest to ITW’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LILAK | 40 | 406793 | 40 |
| VLO | 56 | 1842981 | 8 |
| EBAY | 83 | 3681749 | -16 |
| SYT | 13 | 44954 | -3 |
As you can see these stocks had an average of 48 hedge funds with bullish positions and the average amount invested in these stocks was $1.49 billion. That figure was $935 million in ITW’s case. eBay Inc (NASDAQ:EBAY) is the most popular stock in this table, while Syngenta AG (ADR) (NYSE:SYT) is the least popular one with only 13 bullish hedge fund positions. Illinois Tool Works Inc. (NYSE:ITW) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard EBAY might be a better candidate to consider a long position.
