Hedge Funds Are Souring On Waste Management, Inc. (WM)

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30th, so let’s proceed with the discussion of the hedge fund sentiment on Waste Management, Inc. (NYSE:WM).

Waste Management, Inc. (NYSE:WM) was in 36 hedge funds’ portfolios at the end of September. The all time high for this statistic is 52. WM investors should be aware of a decrease in hedge fund sentiment of late. There were 39 hedge funds in our database with WM positions at the end of the second quarter. Our calculations also showed that WM 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. Now we’re going to take a glance at the new hedge fund action encompassing Waste Management, Inc. (NYSE:WM).

Joel Greenblatt of Gotham Asset Management

Do Hedge Funds Think WM Is A Good Stock To Buy Now?

Heading into the fourth quarter of 2021, a total of 36 of the hedge funds tracked by Insider Monkey were long this stock, a change of -8% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards WM over the last 25 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Waste Management, Inc. (NYSE:WM) was held by Bill & Melinda Gates Foundation Trust, which reported holding $2783.1 million worth of stock at the end of September. It was followed by Impax Asset Management with a $393.4 million position. Other investors bullish on the company included AQR Capital Management, Locust Wood Capital Advisers, and Millennium Management. In terms of the portfolio weights assigned to each position Bill & Melinda Gates Foundation Trust allocated the biggest weight to Waste Management, Inc. (NYSE:WM), around 12% of its 13F portfolio. Locust Wood Capital Advisers is also relatively very bullish on the stock, setting aside 4.15 percent of its 13F equity portfolio to WM.

Seeing as Waste Management, Inc. (NYSE:WM) has experienced a decline in interest from the aggregate hedge fund industry, we can see that there exists a select few fund managers who sold off their full holdings heading into Q4. Interestingly, John Overdeck and David Siegel’s Two Sigma Advisors dumped the biggest position of all the hedgies followed by Insider Monkey, worth about $79.4 million in stock, and Zilvinas Mecelis’s Covalis Capital was right behind this move, as the fund dumped about $8.9 million worth. These moves are important to note, as total hedge fund interest dropped by 3 funds heading into Q4.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Waste Management, Inc. (NYSE:WM) but similarly valued. We will take a look at Autodesk, Inc. (NASDAQ:ADSK), Banco Santander, S.A. (NYSE:SAN), VMware, Inc. (NYSE:VMW), Workday Inc (NASDAQ:WDAY), Boston Scientific Corporation (NYSE:BSX), Activision Blizzard, Inc. (NASDAQ:ATVI), and Stellantis N.V. (NYSE:STLA). All of these stocks’ market caps resemble WM’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 46 hedge funds with bullish positions and the average amount invested in these stocks was $2632 million. That figure was $3629 million in WM’s case. Activision Blizzard, Inc. (NASDAQ:ATVI) is the most popular stock in this table. On the other hand Banco Santander, S.A. (NYSE:SAN) is the least popular one with only 14 bullish hedge fund positions. Waste Management, Inc. (NYSE:WM) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for WM is 39.4. 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 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 WM as the stock returned 7.6% 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.