We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (10 coronavirus predictions).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. We at Insider Monkey have gone over 835 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of December 31st. In this article, we look at what those funds think of Jones Lang LaSalle Inc (NYSE:JLL) based on that data.
Jones Lang LaSalle Inc (NYSE:JLL) was in 30 hedge funds’ portfolios at the end of December. JLL investors should pay attention to a decrease in hedge fund interest recently. There were 31 hedge funds in our database with JLL positions at the end of the previous quarter. Our calculations also showed that JLL isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).
If you’d ask most stock holders, hedge funds are assumed to be slow, outdated financial vehicles of years past. While there are over 8000 funds trading at the moment, Our researchers look at the leaders of this group, approximately 850 funds. These money managers handle the lion’s share of the smart money’s total capital, and by tailing their inimitable picks, Insider Monkey has unearthed numerous investment strategies that have historically outstripped the market. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 35.3% since February 2017 (through March 3rd) even though the market was up more than 35% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
David Blood of Generation Investment Management
We leave no stone unturned when looking for the next great investment idea. For example we recently identified a stock that trades 25% below the net cash on its balance sheet. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences, and go through short-term trade recommendations like this one. We even check out the recommendations of services with hard to believe track records. 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. Keeping this in mind we’re going to take a look at the new hedge fund action regarding Jones Lang LaSalle Inc (NYSE:JLL).
How have hedgies been trading Jones Lang LaSalle Inc (NYSE:JLL)?
At the end of the fourth quarter, a total of 30 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -3% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in JLL over the last 18 quarters. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
More specifically, Generation Investment Management was the largest shareholder of Jones Lang LaSalle Inc (NYSE:JLL), with a stake worth $831.7 million reported as of the end of September. Trailing Generation Investment Management was Ariel Investments, which amassed a stake valued at $141.4 million. Citadel Investment Group, Diamond Hill Capital, and Capital Growth Management 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 Marlowe Partners allocated the biggest weight to Jones Lang LaSalle Inc (NYSE:JLL), around 9% of its 13F portfolio. Generation Investment Management is also relatively very bullish on the stock, designating 5.32 percent of its 13F equity portfolio to JLL.
Due to the fact that Jones Lang LaSalle Inc (NYSE:JLL) has witnessed bearish sentiment from hedge fund managers, logic holds that there lies a certain “tier” of hedgies who sold off their positions entirely heading into Q4. Intriguingly, John Khoury’s Long Pond Capital dumped the largest investment of the “upper crust” of funds followed by Insider Monkey, totaling close to $44.4 million in stock. Paul Marshall and Ian Wace’s fund, Marshall Wace LLP, also sold off its stock, about $5.5 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds heading into Q4.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Jones Lang LaSalle Inc (NYSE:JLL) but similarly valued. These stocks are Lamar Advertising Co (NASDAQ:LAMR), BorgWarner Inc. (NYSE:BWA), Interpublic Group of Companies Inc (NYSE:IPG), and Western Midstream Partners, LP (NYSE:WES). This group of stocks’ market caps resemble JLL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LAMR | 28 | 251922 | -5 |
| BWA | 27 | 737869 | 1 |
| IPG | 26 | 755208 | -1 |
| WES | 13 | 96321 | 2 |
| Average | 23.5 | 460330 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.5 hedge funds with bullish positions and the average amount invested in these stocks was $460 million. That figure was $1283 million in JLL’s case. Lamar Advertising Co (NASDAQ:LAMR) is the most popular stock in this table. On the other hand Western Midstream Partners, LP (NYSE:WES) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Jones Lang LaSalle Inc (NYSE:JLL) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 22.3% in 2020 through March 16th and still beat the market by 3.2 percentage points. Unfortunately JLL wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on JLL were disappointed as the stock returned -35.4% during the first two and a half months of 2020 (through March 16th) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in Q1.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
