Is Iron Mountain Incorporated (NYSE:IRM) a good bet right now? We like to analyze hedge fund sentiment before doing days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
Iron Mountain Incorporated (NYSE:IRM) shareholders have witnessed an increase in hedge fund sentiment of late. IRM was in 18 hedge funds’ portfolios at the end of March. There were 11 hedge funds in our database with IRM holdings at the end of the previous quarter. Our calculations also showed that irm 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.
We’re going to take a glance at the latest hedge fund action encompassing Iron Mountain Incorporated (NYSE:IRM).
What have hedge funds been doing with Iron Mountain Incorporated (NYSE:IRM)?
At Q1’s end, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 64% from the fourth quarter of 2018. The graph below displays the number of hedge funds with bullish position in IRM over the last 15 quarters. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
Among these funds, Millennium Management held the most valuable stake in Iron Mountain Incorporated (NYSE:IRM), which was worth $41.8 million at the end of the first quarter. On the second spot was Citadel Investment Group which amassed $31.3 million worth of shares. Moreover, D E Shaw, Two Sigma Advisors, and Citadel Investment Group were also bullish on Iron Mountain Incorporated (NYSE:IRM), allocating a large percentage of their portfolios to this stock.
Now, specific money managers were leading the bulls’ herd. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, created the most valuable position in Iron Mountain Incorporated (NYSE:IRM). Marshall Wace LLP had $3.6 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also initiated a $2.4 million position during the quarter. The following funds were also among the new IRM investors: Dmitry Balyasny’s Balyasny Asset Management, Jeffrey Talpins’s Element Capital Management, and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners.
Let’s check out hedge fund activity in other stocks similar to Iron Mountain Incorporated (NYSE:IRM). These stocks are Sociedad Química y Minera de Chile S.A. (NYSE:SQM), FMC Corporation (NYSE:FMC), Camden Property Trust (NYSE:CPT), and Fidelity National Financial Inc (NYSE:FNF). This group of stocks’ market values are closest to IRM’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SQM | 9 | 41684 | 1 |
| FMC | 29 | 1271678 | -3 |
| CPT | 24 | 428359 | 5 |
| FNF | 30 | 427989 | 2 |
| Average | 23 | 542428 | 1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $542 million. That figure was $150 million in IRM’s case. Fidelity National Financial Inc (NYSE:FNF) is the most popular stock in this table. On the other hand Sociedad Quimica y Minera (NYSE:SQM) is the least popular one with only 9 bullish hedge fund positions. Iron Mountain Incorporated (NYSE:IRM) is not the least popular stock in this group but hedge fund interest is still below average. 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 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately IRM wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); IRM investors were disappointed as the stock returned -13.2% during the same time period 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 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
