Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Israel Chemicals Ltd. (NYSE:ICL) based on that data.
Is Israel Chemicals Ltd. (NYSE:ICL) a buy, sell, or hold? Hedge funds are getting less optimistic. The number of long hedge fund bets went down by 3 in recent months. Our calculations also showed that ICL 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). ICL was in 3 hedge funds’ portfolios at the end of March. There were 6 hedge funds in our database with ICL holdings at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most stock holders, hedge funds are assumed to be slow, outdated financial tools of yesteryear. While there are over 8000 funds trading today, We choose to focus on the leaders of this club, around 850 funds. It is estimated that this group of investors oversee most of the smart money’s total capital, and by watching their matchless stock picks, Insider Monkey has identified numerous investment strategies that have historically defeated the market. Insider Monkey’s flagship short hedge fund strategy defeated 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 Overdeck of Two Sigma Advisors
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. 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 the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to check out the key hedge fund action encompassing Israel Chemicals Ltd. (NYSE:ICL).
Hedge fund activity in Israel Chemicals Ltd. (NYSE:ICL)
At Q1’s end, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of -50% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards ICL over the last 18 quarters. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in Israel Chemicals Ltd. (NYSE:ICL), which was worth $2.9 million at the end of the third quarter. On the second spot was Two Sigma Advisors which amassed $0.1 million worth of shares. Citadel Investment Group was 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 Renaissance Technologies allocated the biggest weight to Israel Chemicals Ltd. (NYSE:ICL), around 0.0028% of its 13F portfolio. Two Sigma Advisors is also relatively very bullish on the stock, earmarking 0.0005 percent of its 13F equity portfolio to ICL.
Due to the fact that Israel Chemicals Ltd. (NYSE:ICL) has witnessed falling interest from the aggregate hedge fund industry, we can see that there were a few hedgies who sold off their full holdings in the third quarter. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital said goodbye to the biggest investment of the 750 funds followed by Insider Monkey, comprising an estimated $9.3 million in stock. Israel Englander’s fund, Millennium Management, also dropped its stock, about $0.6 million worth. These moves are interesting, as total hedge fund interest dropped by 3 funds in the third quarter.
Let’s check out hedge fund activity in other stocks similar to Israel Chemicals Ltd. (NYSE:ICL). We will take a look at Curtiss-Wright Corp. (NYSE:CW), MSA Safety Incorporated (NYSE:MSA), Coty Inc (NYSE:COTY), and Hudson Pacific Properties Inc (NYSE:HPP). All of these stocks’ market caps resemble ICL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CW | 21 | 256781 | -1 |
| MSA | 11 | 26188 | -4 |
| COTY | 33 | 183298 | 4 |
| HPP | 19 | 231967 | 0 |
| Average | 21 | 174559 | -0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $175 million. That figure was $3 million in ICL’s case. Coty Inc (NYSE:COTY) is the most popular stock in this table. On the other hand MSA Safety Incorporated (NYSE:MSA) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Israel Chemicals Ltd. (NYSE:ICL) is even less popular than MSA. Hedge funds dodged a bullet by taking a bearish stance towards ICL. Our calculations showed that the top 10 most popular hedge fund stocks 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 managed to beat the market by 15.6 percentage points. Unfortunately ICL wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); ICL investors were disappointed as the stock returned 11.1% during the second quarter (through May 22nd) 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 most of these stocks already outperformed the market so far in 2020.
Disclosure: None. This article was originally published at Insider Monkey.
