The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. In this article we look at what those investors think of Linde plc (NYSE:LIN).
Linde plc (NYSE:LIN) investors should pay attention to an increase in enthusiasm from smart money of late. Our calculations also showed that LIN isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
According to most shareholders, hedge funds are assumed to be underperforming, old investment tools of yesteryear. While there are greater than 8000 funds in operation today, We choose to focus on the elite of this group, about 850 funds. These money managers orchestrate the majority of the hedge fund industry’s total capital, and by paying attention to their best picks, Insider Monkey has unearthed numerous investment strategies that have historically outperformed Mr. Market. Insider Monkey’s flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
John Armitage of Egerton Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we are still not out of the woods in terms of the coronavirus pandemic. So, we checked out this analyst’s “corona catalyst plays“. We interview hedge fund managers and ask them about best ideas. You can watch our latest hedge fund manager interview here and find out the name of the large-cap healthcare stock that Sio Capital’s Michael Castor expects to double. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s take a look at the latest hedge fund action encompassing Linde plc (NYSE:LIN).
How are hedge funds trading Linde plc (NYSE:LIN)?
At Q1’s end, a total of 53 of the hedge funds tracked by Insider Monkey were long this stock, a change of 13% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in LIN over the last 18 quarters. So, let’s check out 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, Ako Capital, managed by Nicolai Tangen, holds the biggest position in Linde plc (NYSE:LIN). Ako Capital has a $662.9 million position in the stock, comprising 14% of its 13F portfolio. The second largest stake is held by Egerton Capital Limited, led by John Armitage, holding a $500 million position; 5.2% of its 13F portfolio is allocated to the company. Some other members of the smart money that hold long positions contain Daniel Sundheim’s D1 Capital Partners, Robert Pitts’s Steadfast Capital Management and Brandon Haley’s Holocene Advisors. In terms of the portfolio weights assigned to each position Ako Capital allocated the biggest weight to Linde plc (NYSE:LIN), around 13.97% of its 13F portfolio. Polaris Capital Management is also relatively very bullish on the stock, setting aside 10.78 percent of its 13F equity portfolio to LIN.
Now, key hedge funds were leading the bulls’ herd. Egerton Capital Limited, managed by John Armitage, created the largest position in Linde plc (NYSE:LIN). Egerton Capital Limited had $500 million invested in the company at the end of the quarter. Doug Silverman and Alexander Klabin’s Senator Investment Group also made a $64.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, John Overdeck and David Siegel’s Two Sigma Advisors, and Andrew Byington’s Appian Way Asset Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Linde plc (NYSE:LIN) but similarly valued. These stocks are Citigroup Inc. (NYSE:C), Royal Bank of Canada (NYSE:RY), Anheuser-Busch InBev SA/NV (NYSE:BUD), and The Boeing Company (NYSE:BA). This group of stocks’ market values resemble LIN’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| C | 86 | 5494249 | -12 |
| RY | 16 | 138801 | -4 |
| BUD | 17 | 877182 | -6 |
| BA | 54 | 877378 | -28 |
| Average | 43.25 | 1846903 | -12.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 43.25 hedge funds with bullish positions and the average amount invested in these stocks was $1847 million. That figure was $3351 million in LIN’s case. Citigroup Inc. (NYSE:C) is the most popular stock in this table. On the other hand Royal Bank of Canada (NYSE:RY) is the least popular one with only 16 bullish hedge fund positions. Linde plc (NYSE:LIN) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 7.9% in 2020 through May 22nd but beat the market by 15.6 percentage points. Unfortunately LIN wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on LIN were disappointed as the stock returned 10.3% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.
