After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Ralph Lauren Corporation (NYSE:RL).
Is Ralph Lauren Corporation (NYSE:RL) a buy, sell, or hold? Hedge funds were in a pessimistic mood. The number of long hedge fund bets retreated by 7 lately. Ralph Lauren Corporation (NYSE:RL) was in 25 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 39. Our calculations also showed that RL isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 32 hedge funds in our database with RL positions at the end of the second quarter.
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 peek at the recent hedge fund action surrounding Ralph Lauren Corporation (NYSE:RL).
Gavin Saitowitz of Prelude Capital
Do Hedge Funds Think RL Is A Good Stock To Buy Now?
At third quarter’s end, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of -22% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in RL over the last 25 quarters. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
Among these funds, Royce & Associates held the most valuable stake in Ralph Lauren Corporation (NYSE:RL), which was worth $79.7 million at the end of the third quarter. On the second spot was Adage Capital Management which amassed $70.8 million worth of shares. Balyasny Asset Management, Two Sigma Advisors, and GLG Partners 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 Hickory Lane Capital Management allocated the biggest weight to Ralph Lauren Corporation (NYSE:RL), around 2.51% of its 13F portfolio. Levin Easterly Partners is also relatively very bullish on the stock, designating 1.49 percent of its 13F equity portfolio to RL.
Since Ralph Lauren Corporation (NYSE:RL) has faced declining sentiment from hedge fund managers, it’s safe to say that there exists a select few funds that elected to cut their full holdings in the third quarter. Intriguingly, Alexander Mitchell’s Scopus Asset Management sold off the largest stake of all the hedgies followed by Insider Monkey, comprising close to $90.9 million in stock. Robert Boucai’s fund, Newbrook Capital Advisors, also said goodbye to its stock, about $20.7 million worth. These transactions are interesting, as total hedge fund interest was cut by 7 funds in the third quarter.
Let’s also examine hedge fund activity in other stocks similar to Ralph Lauren Corporation (NYSE:RL). These stocks are Pinnacle West Capital Corporation (NYSE:PNW), Arrival (NASDAQ:ARVL), Commerce Bancshares, Inc. (NASDAQ:CBSH), APA Corporation (NASDAQ:APA), Penske Automotive Group, Inc. (NYSE:PAG), Nutanix, Inc. (NASDAQ:NTNX), and Tetra Tech, Inc. (NASDAQ:TTEK). This group of stocks’ market caps resemble RL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PNW | 21 | 175044 | 3 |
| ARVL | 4 | 10081 | -13 |
| CBSH | 16 | 106578 | 0 |
| APA | 33 | 458675 | -4 |
| PAG | 17 | 241932 | -2 |
| NTNX | 28 | 1277247 | -1 |
| TTEK | 16 | 119537 | -9 |
| Average | 19.3 | 341299 | -3.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.3 hedge funds with bullish positions and the average amount invested in these stocks was $341 million. That figure was $445 million in RL’s case. APA Corporation (NASDAQ:APA) is the most popular stock in this table. On the other hand Arrival (NASDAQ:ARVL) is the least popular one with only 4 bullish hedge fund positions. Ralph Lauren Corporation (NYSE:RL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for RL is 53.4. 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 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 RL as the stock returned 10.5% since the end of Q3 (through 12/9) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Ralph Lauren Corp (NYSE:RL)
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Disclosure: None. This article was originally published at Insider Monkey.
