Is FMC Stock A Buy or Sell?

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 5 years and analyze what the smart money thinks of FMC Corporation (NYSE:FMC) based on that data.

Is FMC stock a buy or sell? Prominent investors were becoming hopeful. The number of long hedge fund bets increased by 4 recently. FMC Corporation (NYSE:FMC) was in 45 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 46. Our calculations also showed that FMC isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings). There were 41 hedge funds in our database with FMC holdings at the end of September.

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’ 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 124 percentage points since March 2017 (see the details here).

Zilvinas Mecelis of Covalis Capital

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. Recently Oregon became the first state to legalize psychedelic mushrooms which are shown to have promising results in treating depression, addiction, and PTSD in early stage academic studies. So, we are checking out this psychedelic drug stock idea right now. We go through lists like the 10 best biotech stocks to invest in to pick the next stock 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 (or at the end of this article). Now we’re going to check out the new hedge fund action encompassing FMC Corporation (NYSE:FMC).

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

At the end of the fourth quarter, a total of 45 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 10% from the previous quarter. The graph below displays the number of hedge funds with bullish position in FMC over the last 22 quarters. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were upping their stakes significantly (or already accumulated large positions).

The largest stake in FMC Corporation (NYSE:FMC) was held by Pelham Capital, which reported holding $120 million worth of stock at the end of December. It was followed by Cardinal Capital with a $96 million position. Other investors bullish on the company included Glenview Capital, D E Shaw, and Millennium Management. In terms of the portfolio weights assigned to each position Covalis Capital allocated the biggest weight to FMC Corporation (NYSE:FMC), around 7.99% of its 13F portfolio. Pelham Capital is also relatively very bullish on the stock, earmarking 7.94 percent of its 13F equity portfolio to FMC.

As industrywide interest jumped, specific money managers were breaking ground themselves. Covalis Capital, managed by Zilvinas Mecelis, created the most outsized position in FMC Corporation (NYSE:FMC). Covalis Capital had $21.8 million invested in the company at the end of the quarter. Lee Ainslie’s Maverick Capital also made a $1.9 million investment in the stock during the quarter. The other funds with brand new FMC positions are Mika Toikka’s AlphaCrest Capital Management, Jinghua Yan’s TwinBeech Capital, and Phil Frohlich’s Prescott Group Capital Management.

Let’s go over hedge fund activity in other stocks similar to FMC Corporation (NYSE:FMC). We will take a look at Fair Isaac Corporation (NYSE:FICO), Duke Realty Corporation (NYSE:DRE), NetApp Inc. (NASDAQ:NTAP), Masimo Corporation (NASDAQ:MASI), Oak Street Health, Inc. (NYSE:OSH), Boston Properties, Inc. (NYSE:BXP), and ABIOMED, Inc. (NASDAQ:ABMD). This group of stocks’ market valuations are closest to FMC’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 $622 million. That figure was $572 million in FMC’s case. Fair Isaac Corporation (NYSE:FICO) is the most popular stock in this table. On the other hand Duke Realty Corporation (NYSE:DRE) is the least popular one with only 17 bullish hedge fund positions. Compared to these stocks FMC Corporation (NYSE:FMC) is more popular among hedge funds. Our overall hedge fund sentiment score for FMC is 88.3. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 5.3% in 2021 through March 19th and still beat the market by 0.8 percentage points. Unfortunately FMC wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on FMC were disappointed as the stock returned -4.4% since the end of the fourth quarter (through 3/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

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