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 have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31 holdings, data that is available nowhere else. Should you consider International Flavors & Fragrances Inc (NYSE:IFF) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
International Flavors & Fragrances Inc (NYSE:IFF) investors should be aware of a decrease in hedge fund sentiment lately. Our calculations also showed that IFF isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s check out the fresh hedge fund action surrounding International Flavors & Fragrances Inc (NYSE:IFF).
How are hedge funds trading International Flavors & Fragrances Inc (NYSE:IFF)?
At Q1’s end, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -24% from the fourth quarter of 2018. Below, you can check out the change in hedge fund sentiment towards IFF over the last 15 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, GAMCO Investors was the largest shareholder of International Flavors & Fragrances Inc (NYSE:IFF), with a stake worth $74.1 million reported as of the end of March. Trailing GAMCO Investors was Sirios Capital Management, which amassed a stake valued at $46.2 million. Citadel Investment Group, Echo Street Capital Management, and Markel Gayner Asset Management were also very fond of the stock, giving the stock large weights in their portfolios.
Judging by the fact that International Flavors & Fragrances Inc (NYSE:IFF) has experienced declining sentiment from the smart money, we can see that there was a specific group of funds that slashed their full holdings last quarter. At the top of the heap, Howard Marks’s Oaktree Capital Management said goodbye to the largest position of the 700 funds monitored by Insider Monkey, totaling about $9.6 million in stock. Andrew Feldstein and Stephen Siderow’s fund, Blue Mountain Capital, also dropped its stock, about $6.2 million worth. These moves are important to note, as total hedge fund interest fell by 5 funds last quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as International Flavors & Fragrances Inc (NYSE:IFF) but similarly valued. These stocks are Marathon Oil Corporation (NYSE:MRO), Rollins, Inc. (NYSE:ROL), Dover Corporation (NYSE:DOV), and Gartner Inc (NYSE:IT). This group of stocks’ market valuations are closest to IFF’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MRO | 37 | 732698 | 0 |
| ROL | 20 | 286732 | -2 |
| DOV | 30 | 474968 | 1 |
| IT | 15 | 1205964 | -6 |
| Average | 25.5 | 675091 | -1.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.5 hedge funds with bullish positions and the average amount invested in these stocks was $675 million. That figure was $188 million in IFF’s case. Marathon Oil Corporation (NYSE:MRO) is the most popular stock in this table. On the other hand Gartner Inc (NYSE:IT) is the least popular one with only 15 bullish hedge fund positions. International Flavors & Fragrances Inc (NYSE:IFF) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on IFF as the stock returned 15.7% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
