Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Masco Corporation (NYSE:MAS).
Masco Corporation (NYSE:MAS) investors should be aware of a decrease in support from the world’s most elite money managers in recent months. Masco Corporation (NYSE:MAS) was in 29 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 51. Our calculations also showed that MAS isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
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 we’re going to take a gander at the recent hedge fund action encompassing Masco Corporation (NYSE:MAS).
David S. Winter of 40 North Management
Do Hedge Funds Think MAS Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 29 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -17% from the previous quarter. By comparison, 46 hedge funds held shares or bullish call options in MAS a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, David S. Winter and David J. Millstone’s 40 North Management has the biggest position in Masco Corporation (NYSE:MAS), worth close to $102.8 million, amounting to 3.2% of its total 13F portfolio. Coming in second is Ariel Investments, led by John W. Rogers, holding a $97.4 million position; the fund has 0.9% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that hold long positions consist of Ken Griffin’s Citadel Investment Group, Dmitry Balyasny’s Balyasny Asset Management and Cliff Asness’s AQR Capital Management. In terms of the portfolio weights assigned to each position 12th Street Asset Management allocated the biggest weight to Masco Corporation (NYSE:MAS), around 3.32% of its 13F portfolio. 40 North Management is also relatively very bullish on the stock, dishing out 3.17 percent of its 13F equity portfolio to MAS.
Judging by the fact that Masco Corporation (NYSE:MAS) has experienced a decline in interest from the entirety of the hedge funds we track, it’s easy to see that there is a sect of fund managers that elected to cut their full holdings last quarter. It’s worth mentioning that John Overdeck and David Siegel’s Two Sigma Advisors dumped the biggest investment of the 750 funds followed by Insider Monkey, valued at close to $17.3 million in stock, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital was right behind this move, as the fund dropped about $8.3 million worth. These transactions are interesting, as total hedge fund interest fell by 6 funds last quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Masco Corporation (NYSE:MAS) but similarly valued. These stocks are News Corp (NASDAQ:NWS), Lumen Technologies, Inc. (NYSE:LUMN), Eastman Chemical Company (NYSE:EMN), Elastic N.V. (NYSE:ESTC), Leidos Holdings Inc (NYSE:LDOS), The Mosaic Company (NYSE:MOS), and Vail Resorts, Inc. (NYSE:MTN). This group of stocks’ market valuations match MAS’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NWS | 13 | 130888 | -6 |
| LUMN | 25 | 941373 | -8 |
| EMN | 30 | 254650 | 3 |
| ESTC | 59 | 2985926 | 4 |
| LDOS | 14 | 206379 | -8 |
| MOS | 40 | 912653 | -3 |
| MTN | 40 | 644916 | 0 |
| Average | 31.6 | 868112 | -2.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.6 hedge funds with bullish positions and the average amount invested in these stocks was $868 million. That figure was $529 million in MAS’s case. Elastic N.V. (NYSE:ESTC) is the most popular stock in this table. On the other hand News Corp (NASDAQ:NWS) is the least popular one with only 13 bullish hedge fund positions. Masco Corporation (NYSE:MAS) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for MAS is 33.5. 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. A small number of hedge funds were also right about betting on MAS as the stock returned 19.1% since the end of the third quarter (through 11/30) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
