Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Weyerhaeuser Co. (NYSE:WY), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is Weyerhaeuser Co. (NYSE:WY) ready to rally soon? Money managers were taking a pessimistic view. The number of long hedge fund bets dropped by 11 in recent months. Weyerhaeuser Co. (NYSE:WY) was in 28 hedge funds’ portfolios at the end of September. The all time high for this statistic is 41. Our calculations also showed that WY isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 39 hedge funds in our database with WY holdings at the end of June.
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. With all of this in mind let’s take a gander at the recent hedge fund action encompassing Weyerhaeuser Co. (NYSE:WY).
Martin Whitman of Third Avenue Management
Do Hedge Funds Think WY Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 28 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -28% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards WY over the last 25 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Third Avenue Management was the largest shareholder of Weyerhaeuser Co. (NYSE:WY), with a stake worth $29.5 million reported as of the end of September. Trailing Third Avenue Management was AQR Capital Management, which amassed a stake valued at $26.1 million. Horizon Asset Management, Renaissance Technologies, and Adage Capital 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 Third Avenue Management allocated the biggest weight to Weyerhaeuser Co. (NYSE:WY), around 3.97% of its 13F portfolio. Waterfront Capital Partners is also relatively very bullish on the stock, designating 1.25 percent of its 13F equity portfolio to WY.
Seeing as Weyerhaeuser Co. (NYSE:WY) has faced bearish sentiment from hedge fund managers, logic holds that there is a sect of hedgies that slashed their entire stakes last quarter. It’s worth mentioning that Matthew Stadelman’s Diamond Hill Capital dumped the largest investment of the “upper crust” of funds tracked by Insider Monkey, worth close to $277.7 million in stock, and Stuart J. Zimmer’s Zimmer Partners was right behind this move, as the fund dropped about $59.7 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 11 funds last quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Weyerhaeuser Co. (NYSE:WY) but similarly valued. We will take a look at Telefonica S.A. (NYSE:TEF), Wayfair Inc (NYSE:W), Carnival Corporation & plc (NYSE:CUK), Arista Networks Inc (NYSE:ANET), Etsy Inc (NASDAQ:ETSY), V.F. Corporation (NYSE:VFC), and Deutsche Bank Aktiengesellschaft (NYSE:DB). This group of stocks’ market values are closest to WY’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TEF | 5 | 12431 | 1 |
| W | 31 | 3246491 | -4 |
| CUK | 9 | 239633 | -1 |
| ANET | 32 | 487538 | -3 |
| ETSY | 47 | 1435748 | 0 |
| VFC | 23 | 284894 | -9 |
| DB | 15 | 1795111 | -5 |
| Average | 23.1 | 1071692 | -3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.1 hedge funds with bullish positions and the average amount invested in these stocks was $1072 million. That figure was $212 million in WY’s case. Etsy Inc (NASDAQ:ETSY) is the most popular stock in this table. On the other hand Telefonica S.A. (NYSE:TEF) is the least popular one with only 5 bullish hedge fund positions. Weyerhaeuser Co. (NYSE:WY) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for WY is 41.9. 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 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. Hedge funds were also right about betting on WY as the stock returned 13.8% since the end of Q3 (through 12/9) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
