Is Corning Incorporated (NYSE:GLW) a healthy stock for your portfolio? Hedge funds are becoming hopeful. The number of long hedge fund positions advanced by 3 recently. Our calculations also showed that GLW isn’t among the 30 most popular stocks among hedge funds.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. 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 32 percentage points since May 2014 through March 12, 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 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to view the fresh hedge fund action encompassing Corning Incorporated (NYSE:GLW).
Hedge fund activity in Corning Incorporated (NYSE:GLW)
At the end of the fourth quarter, a total of 30 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from the second quarter of 2018. Below, you can check out the change in hedge fund sentiment towards GLW over the last 14 quarters. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
The largest stake in Corning Incorporated (NYSE:GLW) was held by Millennium Management, which reported holding $100.6 million worth of stock at the end of September. It was followed by Two Sigma Advisors with a $69.7 million position. Other investors bullish on the company included Valueworks LLC, Yacktman Asset Management, and Citadel Investment Group.
With a general bullishness amongst the heavyweights, key money managers have been driving this bullishness. Gotham Asset Management, managed by Joel Greenblatt, created the most valuable position in Corning Incorporated (NYSE:GLW). Gotham Asset Management had $26.3 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $4.3 million investment in the stock during the quarter. The following funds were also among the new GLW investors: Matthew Tewksbury’s Stevens Capital Management, Nick Niell’s Arrowgrass Capital Partners, and Matthew Hulsizer’s PEAK6 Capital Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Corning Incorporated (NYSE:GLW) but similarly valued. These stocks are MPLX LP (NYSE:MPLX), AvalonBay Communities Inc (NYSE:AVB), State Street Corporation (NYSE:STT), and Worldpay, Inc. (NYSE:WP). This group of stocks’ market valuations are closest to GLW’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MPLX | 11 | 331776 | 0 |
| AVB | 27 | 955741 | 1 |
| STT | 32 | 910556 | -3 |
| WP | 48 | 2361851 | -12 |
| Average | 29.5 | 1139981 | -3.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.5 hedge funds with bullish positions and the average amount invested in these stocks was $1140 million. That figure was $457 million in GLW’s case. Worldpay, Inc. (NYSE:WP) is the most popular stock in this table. On the other hand MPLX LP (NYSE:MPLX) is the least popular one with only 11 bullish hedge fund positions. Corning Incorporated (NYSE:GLW) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 15 most popular stocks among hedge funds returned 19.7% through March 15th and outperformed the S&P 500 ETF (SPY) by 6.6 percentage points. Hedge funds were also right about betting on GLW, though not to the same extent, as the stock returned 14.9% and outperformed the market as well.
