The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, when the S&P 500 Index was trading around the 4300 level. Since then investors decided to bet on the economic recovery and a stock market rebound even though we experienced a temporary correction in January. In this article you are going to find out whether hedge funds thought Vontier Corporation (NYSE:VNT) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.
Vontier Corporation (NYSE:VNT) has experienced a decrease in enthusiasm from smart money in recent months. Vontier Corporation (NYSE:VNT) was in 31 hedge funds’ portfolios at the end of September. The all time high for this statistic is 38. There were 34 hedge funds in our database with VNT holdings at the end of June. Our calculations also showed that VNT isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now we’re going to take a look at the key hedge fund action surrounding Vontier Corporation (NYSE:VNT).
Jeffrey Gates of Gates Capital
Do Hedge Funds Think VNT Is A Good Stock To Buy Now?
At the end of September, a total of 31 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -9% from the previous quarter. On the other hand, there were a total of 0 hedge funds with a bullish position in VNT a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Vontier Corporation (NYSE:VNT) was held by Gates Capital Management, which reported holding $149.1 million worth of stock at the end of September. It was followed by Laurion Capital Management with a $100.7 million position. Other investors bullish on the company included Royce & Associates, Millennium Management, and Miller Value Partners. In terms of the portfolio weights assigned to each position Key Square Capital Management allocated the biggest weight to Vontier Corporation (NYSE:VNT), around 6.85% of its 13F portfolio. DSAM Partners is also relatively very bullish on the stock, dishing out 4.6 percent of its 13F equity portfolio to VNT.
Judging by the fact that Vontier Corporation (NYSE:VNT) has experienced declining sentiment from the entirety of the hedge funds we track, we can see that there exists a select few hedgies that slashed their entire stakes in the third quarter. It’s worth mentioning that Edward Goodnow’s Goodnow Investment Group dumped the largest stake of all the hedgies watched by Insider Monkey, valued at about $3.5 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also said goodbye to its stock, about $1.8 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 3 funds in the third quarter.
Let’s now review hedge fund activity in other stocks similar to Vontier Corporation (NYSE:VNT). These stocks are The AZEK Company Inc. (NYSE:AZEK), Watts Water Technologies Inc (NYSE:WTS), Range Resources Corp. (NYSE:RRC), Clean Harbors Inc (NYSE:CLH), Fate Therapeutics Inc (NASDAQ:FATE), Valvoline Inc. (NYSE:VVV), and Harley-Davidson, Inc. (NYSE:HOG). This group of stocks’ market caps resemble VNT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AZEK | 38 | 427310 | 1 |
| WTS | 16 | 515456 | -2 |
| RRC | 25 | 527031 | 0 |
| CLH | 24 | 391049 | 0 |
| FATE | 36 | 2103428 | -4 |
| VVV | 23 | 641833 | -3 |
| HOG | 33 | 956467 | -4 |
| Average | 27.9 | 794653 | -1.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.9 hedge funds with bullish positions and the average amount invested in these stocks was $795 million. That figure was $806 million in VNT’s case. The AZEK Company Inc. (NYSE:AZEK) is the most popular stock in this table. On the other hand Watts Water Technologies Inc (NYSE:WTS) is the least popular one with only 16 bullish hedge fund positions. Vontier Corporation (NYSE:VNT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VNT is 60.6. 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 positive signal but 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 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately, VNT wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on VNT were disappointed as the stock returned -16.3% since the end of September (through 1/31) 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 all of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
