We can judge whether Armstrong World Industries, Inc. (NYSE:AWI) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, research shows that these picks historically outperformed the market when we factor in known risk factors.
Armstrong World Industries, Inc. (NYSE:AWI) investors should be aware of an increase in activity from the world’s largest hedge funds in recent months. At the end of this article we will also compare AWI to other stocks including Noble Corporation plc (NYSE:NE), Compass Minerals International, Inc. (NYSE:CMP), and Agios Pharmaceuticals Inc (NASDAQ:AGIO) to get a better sense of its popularity.
Follow Armstrong World Industries Inc (NYSE:AWI)
Follow Armstrong World Industries Inc (NYSE:AWI)
In the 21st century investor’s toolkit, there are a lot of gauges shareholders can use to appraise publicly traded companies. Two of the most innovative gauges are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the best picks of the top investment managers can outpace their index-focused peers by a significant amount (see the details here).
With all of this in mind, let’s go over the new action surrounding Armstrong World Industries, Inc. (NYSE:AWI).
What have hedge funds been doing with Armstrong World Industries, Inc. (NYSE:AWI)?
At Q3’s end, a total of 37 of the hedge funds tracked by Insider Monkey were long this stock, a change of 16% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, ValueAct Capital, managed by Jeffrey Ubben, holds the biggest position in Armstrong World Industries, Inc. (NYSE:AWI). ValueAct Capital has an $439.2 million position in the stock, comprising 2.6% of its 13F portfolio. Sitting at the No. 2 spot is Eton Park Capital, led by Eric Mindich, holding an $175 million position; the fund has 3% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism encompass D. E. Shaw’s D E Shaw, Sharlyn C. Heslam’s Stockbridge Partners and Masroor Siddiqui and Bruce Emery’s Naya Capital.
Now, key hedge funds have jumped into Armstrong World Industries, Inc. (NYSE:AWI) headfirst. 40 North Management, managed by David S. Winter and David J. Millstone, established the most valuable position in Armstrong World Industries, Inc. (NYSE:AWI). 40 North Management had $17.7 million invested in the company at the end of the quarter. Robert Vollero and Gentry T. Beach’s Vollero Beach Capital Partners also initiated a $9.3 million position during the quarter. The following funds were also among the new AWI investors: Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Glenn Russell Dubin’s Highbridge Capital Management, and Ken Brodkowitz and Mike Vermut’s Newland Capital.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Armstrong World Industries, Inc. (NYSE:AWI) but similarly valued. These stocks are Noble Corporation plc (NYSE:NE), Compass Minerals International, Inc. (NYSE:CMP), Agios Pharmaceuticals Inc (NASDAQ:AGIO), and United Bankshares, Inc. (NASDAQ:UBSI). This group of stocks’ market caps resemble AWI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NE | 22 | 186718 | -5 |
| CMP | 10 | 82064 | -8 |
| AGIO | 9 | 31267 | -7 |
| UBSI | 7 | 29465 | 1 |
As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $82 million. That figure was $1318 million in AWI’s case. Noble Corporation plc (NYSE:NE) is the most popular stock in this table. On the other hand United Bankshares, Inc. (NASDAQ:UBSI) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Armstrong World Industries, Inc. (NYSE:AWI), with 37 bullish hedge fund positions, is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
