Here is What Hedge Funds Think About Ingersoll Rand Inc. (IR)

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended March 31st, so let’s proceed with the discussion of the hedge fund sentiment on Ingersoll Rand Inc. (NYSE:IR).

Ingersoll Rand Inc. (NYSE:IR) has seen an increase in enthusiasm from smart money recently. Ingersoll Rand Inc. (NYSE:IR) was in 35 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 47. Our calculations also showed that IR isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Ole Andreas Halvorsen of Viking Global

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Do Hedge Funds Think IR Is A Good Stock To Buy Now?

At the end of the first quarter, a total of 35 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 IR over the last 23 quarters. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).

The largest stake in Ingersoll Rand Inc. (NYSE:IR) was held by Viking Global, which reported holding $264.3 million worth of stock at the end of December. It was followed by Citadel Investment Group with a $155.7 million position. Other investors bullish on the company included Adage Capital Management, Holocene Advisors, and Balyasny Asset Management. In terms of the portfolio weights assigned to each position Infini Capital allocated the biggest weight to Ingersoll Rand Inc. (NYSE:IR), around 13.87% of its 13F portfolio. Goodnow Investment Group is also relatively very bullish on the stock, earmarking 2.74 percent of its 13F equity portfolio to IR.

As industrywide interest jumped, key money managers have jumped into Ingersoll Rand Inc. (NYSE:IR) headfirst. Islet Management, managed by Joseph Samuels, assembled the largest position in Ingersoll Rand Inc. (NYSE:IR). Islet Management had $27.1 million invested in the company at the end of the quarter. Anand Parekh’s Alyeska Investment Group also initiated a $5.2 million position during the quarter. The other funds with brand new IR positions are Robert Vincent McHugh’s Jade Capital Advisors, Tony Chin’s Infini Capital, and Israel Englander’s Millennium Management.

Let’s now review hedge fund activity in other stocks similar to Ingersoll Rand Inc. (NYSE:IR). These stocks are Generac Holdings Inc. (NYSE:GNRC), Tractor Supply Company (NASDAQ:TSCO), Hewlett Packard Enterprise Company (NYSE:HPE), Western Digital Corporation (NASDAQ:WDC), Take-Two Interactive Software, Inc. (NASDAQ:TTWO), Teradyne, Inc. (NYSE:TER), and Vipshop Holdings Limited (NYSE:VIPS). This group of stocks’ market values are similar to IR’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 41.3 hedge funds with bullish positions and the average amount invested in these stocks was $1232 million. That figure was $789 million in IR’s case. Western Digital Corporation (NASDAQ:WDC) is the most popular stock in this table. On the other hand Hewlett Packard Enterprise Company (NYSE:HPE) is the least popular one with only 27 bullish hedge fund positions. Ingersoll Rand Inc. (NYSE:IR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for IR is 41.2. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 19.3% in 2021 through June 25th and surpassed the market again by 4.8 percentage points. Unfortunately IR wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); IR investors were disappointed as the stock returned -0.5% since the end of March (through 6/25) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

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Disclosure: None. This article was originally published at Insider Monkey.