ICL Group Ltd. (ICL) Fell Out Of Favor With Hedge Funds

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the fourth quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of ICL Group Ltd. (NYSE:ICL) based on that data.

ICL Group Ltd. (NYSE:ICL) investors should pay attention to a decrease in hedge fund interest in recent months. ICL Group Ltd. (NYSE:ICL) was in 4 hedge funds’ portfolios at the end of March. The all time high for this statistic is 8. Our calculations also showed that ICL isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

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. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

Peter Rathjens of Arrowstreet Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $27 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind we’re going to review the new hedge fund action regarding ICL Group Ltd. (NYSE:ICL).

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

At first quarter’s end, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -20% from the fourth quarter of 2020. By comparison, 3 hedge funds held shares or bullish call options in ICL a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, holds the biggest position in ICL Group Ltd. (NYSE:ICL). Arrowstreet Capital has a $36.5 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Arrowstreet Capital’s heels is Renaissance Technologies, with a $6.2 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining peers that are bullish encompass Dan Kozlowski’s Plaisance Capital, Ken Griffin’s Citadel Investment Group and . In terms of the portfolio weights assigned to each position Plaisance Capital allocated the biggest weight to ICL Group Ltd. (NYSE:ICL), around 0.42% of its 13F portfolio. Arrowstreet Capital is also relatively very bullish on the stock, dishing out 0.05 percent of its 13F equity portfolio to ICL.

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Marshall Wace LLP. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because none of the 750+ hedge funds tracked by Insider Monkey identified ICL as a viable investment and initiated a position in the stock.

Let’s now take a look at hedge fund activity in other stocks similar to ICL Group Ltd. (NYSE:ICL). We will take a look at Brunswick Corporation (NYSE:BC), TELUS International (Cda) Inc. (NYSE:TIXT), IAA, Inc. (NYSE:IAA), ChargePoint Holdings, Inc. (NYSE:CHPT), FLIR Systems, Inc. (NASDAQ:FLIR), Tempur Sealy International Inc. (NYSE:TPX), and Chemed Corporation (NYSE:CHE). This group of stocks’ market valuations are closest to ICL’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 29.3 hedge funds with bullish positions and the average amount invested in these stocks was $704 million. That figure was $44 million in ICL’s case. Brunswick Corporation (NYSE:BC) is the most popular stock in this table. On the other hand TELUS International (Cda) Inc. (NYSE:TIXT) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks ICL Group Ltd. (NYSE:ICL) is even less popular than TIXT. Our overall hedge fund sentiment score for ICL is 19. 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. Hedge funds clearly dropped the ball on ICL as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. 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 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. A small number of hedge funds were also right about betting on ICL as the stock returned 27.1% since Q1 (through June 11th) and outperformed the market by an even larger margin.

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