We at Insider Monkey have gone over 873 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th. In this article, we look at what those funds think of Ferro Corporation (NYSE:FOE) based on that data.
Ferro Corporation (NYSE:FOE) has experienced an increase in enthusiasm from smart money of late. Ferro Corporation (NYSE:FOE) was in 23 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 28. Our calculations also showed that FOE isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Mario Gabelli of GAMCO Investors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. 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 let’s take a peek at the fresh hedge fund action regarding Ferro Corporation (NYSE:FOE).
Do Hedge Funds Think FOE Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 92% from the first quarter of 2020. By comparison, 18 hedge funds held shares or bullish call options in FOE a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Magnetar Capital was the largest shareholder of Ferro Corporation (NYSE:FOE), with a stake worth $105.3 million reported as of the end of June. Trailing Magnetar Capital was GAMCO Investors, which amassed a stake valued at $80.7 million. Alpine Associates, TIG Advisors, and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Water Island Capital allocated the biggest weight to Ferro Corporation (NYSE:FOE), around 1.72% of its 13F portfolio. TIG Advisors is also relatively very bullish on the stock, dishing out 1.22 percent of its 13F equity portfolio to FOE.
Consequently, specific money managers were breaking ground themselves. Magnetar Capital, managed by Alec Litowitz and Ross Laser, initiated the most outsized position in Ferro Corporation (NYSE:FOE). Magnetar Capital had $105.3 million invested in the company at the end of the quarter. Robert Emil Zoellner’s Alpine Associates also initiated a $38 million position during the quarter. The other funds with brand new FOE positions are Carl Tiedemann and Michael Tiedemann’s TIG Advisors, John Orrico’s Water Island Capital, and Orkun Kilic’s Berry Street Capital.
Let’s now review hedge fund activity in other stocks similar to Ferro Corporation (NYSE:FOE). We will take a look at Cohu, Inc. (NASDAQ:COHU), Eventbrite, Inc. (NYSE:EB), Frontline Ltd (NYSE:FRO), Lithium Americas Corp. (NYSE:LAC), TPI Composites, Inc. (NASDAQ:TPIC), Atea Pharmaceuticals, Inc. (NASDAQ:AVIR), and Tri Continental Corporation (NYSE:TY). This group of stocks’ market caps match FOE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| COHU | 15 | 90535 | -10 |
| EB | 25 | 298637 | 1 |
| FRO | 13 | 26574 | 3 |
| LAC | 9 | 31872 | -1 |
| TPIC | 20 | 160838 | 2 |
| AVIR | 17 | 375628 | 4 |
| TY | 3 | 1268 | 1 |
| Average | 14.6 | 140765 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.6 hedge funds with bullish positions and the average amount invested in these stocks was $141 million. That figure was $388 million in FOE’s case. Eventbrite, Inc. (NYSE:EB) is the most popular stock in this table. On the other hand Tri Continental Corporation (NYSE:TY) is the least popular one with only 3 bullish hedge fund positions. Ferro Corporation (NYSE:FOE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FOE is 80.1. 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 24% in 2021 through October 22nd and beat the market again by 1.6 percentage points. Unfortunately FOE wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on FOE were disappointed as the stock returned -3.6% since the end of June (through 10/22) 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 many of these stocks already outperformed the market since 2019.
Follow Ferro Corp (NYSE:FOE)
Follow Ferro Corp (NYSE:FOE)
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Disclosure: None. This article was originally published at Insider Monkey.
