In this article we will analyze whether Floor & Decor Holdings, Inc. (NYSE:FND) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.
Is FND a good stock to buy? Floor & Decor Holdings, Inc. (NYSE:FND) shareholders have witnessed an increase in hedge fund interest in recent months. Floor & Decor Holdings, Inc. (NYSE:FND) was in 38 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 44. There were 31 hedge funds in our database with FND holdings at the end of December. Our calculations also showed that FND isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the 21st century investor’s toolkit there are a multitude of signals investors put to use to value publicly traded companies. A duo of the most innovative signals are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the top picks of the best money managers can beat the S&P 500 by a significant amount (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Dmitry Balyasny of Balyasny Asset Management
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Do Hedge Funds Think FND Is A Good Stock To Buy Now?
At Q1’s end, a total of 38 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 23% from one quarter earlier. By comparison, 23 hedge funds held shares or bullish call options in FND a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
Among these funds, Abdiel Capital Advisors held the most valuable stake in Floor & Decor Holdings, Inc. (NYSE:FND), which was worth $475.9 million at the end of the fourth quarter. On the second spot was Two Creeks Capital Management which amassed $191 million worth of shares. Park Presidio Capital, Emerson Point Capital, and D E Shaw 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 Abdiel Capital Advisors allocated the biggest weight to Floor & Decor Holdings, Inc. (NYSE:FND), around 15.29% of its 13F portfolio. Two Creeks Capital Management is also relatively very bullish on the stock, earmarking 11.65 percent of its 13F equity portfolio to FND.
Consequently, specific money managers have jumped into Floor & Decor Holdings, Inc. (NYSE:FND) headfirst. Renaissance Technologies, initiated the most outsized position in Floor & Decor Holdings, Inc. (NYSE:FND). Renaissance Technologies had $41.9 million invested in the company at the end of the quarter. Jack Woodruff’s Candlestick Capital Management also initiated a $38.2 million position during the quarter. The other funds with brand new FND positions are Dmitry Balyasny’s Balyasny Asset Management, Steve Cohen’s Point72 Asset Management, and Brian Scudieri’s Kehrs Ridge Capital.
Let’s check out hedge fund activity in other stocks similar to Floor & Decor Holdings, Inc. (NYSE:FND). These stocks are Elastic N.V. (NYSE:ESTC), Everest Re Group Ltd (NYSE:RE), Formula One Group (NASDAQ:FWONK), PRA Health Sciences Inc (NASDAQ:PRAH), Gaming and Leisure Properties Inc (NASDAQ:GLPI), Henry Schein, Inc. (NASDAQ:HSIC), and Penumbra Inc (NYSE:PEN). All of these stocks’ market caps resemble FND’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ESTC | 52 | 1884446 | 3 |
| RE | 32 | 520803 | 3 |
| FWONK | 37 | 1672098 | -5 |
| PRAH | 35 | 1066188 | 12 |
| GLPI | 28 | 594880 | -5 |
| HSIC | 32 | 1262137 | -1 |
| PEN | 27 | 399617 | 7 |
| Average | 34.7 | 1057167 | 2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 34.7 hedge funds with bullish positions and the average amount invested in these stocks was $1057 million. That figure was $1100 million in FND’s case. Elastic N.V. (NYSE:ESTC) is the most popular stock in this table. On the other hand Penumbra Inc (NYSE:PEN) is the least popular one with only 27 bullish hedge fund positions. Floor & Decor Holdings, Inc. (NYSE:FND) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FND is 57.9. 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. 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 19.3% in 2021 through June 25th and still beat the market by 4.8 percentage points. Hedge funds were also right about betting on FND, though not to the same extent, as the stock returned 9.5% since Q1 (through June 25th) and outperformed the market as well.
Follow Floor & Decor Holdings Inc. (NYSE:FND)
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Disclosure: None. This article was originally published at Insider Monkey.
