We at Insider Monkey have gone over 700 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 September 30. In this article we look at what those investors think of Fortune Brands Home & Security Inc (NYSE:FBHS).
Fortune Brands Home & Security Inc (NYSE:FBHS) shareholders have witnessed an increase in activity from the world’s largest hedge funds lately. FBHS was in 25 hedge funds’ portfolios at the end of September. There were 24 hedge funds in our database with FBHS positions at the end of the second quarter. At the end of this article we will also compare FBHS to other stocks including CBRE Group Inc (NYSE:CBG), ResMed Inc. (NYSE:RMD), and Shaw Communications Inc (USA) (NYSE:SJR) to get a better sense of its popularity.
Follow Fortune Brands Innovations Inc. (NYSE:FBIN)
Follow Fortune Brands Innovations Inc. (NYSE:FBIN)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
ValeStock / Shutterstock.com
How have hedgies been trading Fortune Brands Home & Security Inc (NYSE:FBHS)?
Heading into the fourth quarter of 2016, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 4% from one quarter earlier, and the third straight quarter with a rise in bullish hedgie positions. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, GAMCO Investors, managed by Mario Gabelli, holds the most valuable position in Fortune Brands Home & Security Inc (NYSE:FBHS). GAMCO Investors has an $84.5 million position in the stock. The second largest stake is held by Two Sigma Advisors, led by John Overdeck and David Siegel, holding a $43.4 million position. Remaining peers that hold long positions consist of Columbus Circle Investors, Cliff Asness’ AQR Capital Management, and Millennium Management, one of the 10 largest hedge funds in the world.
With general bullishness amongst the heavyweights, key money managers were breaking ground themselves. Two Sigma Advisors created the most valuable position in Fortune Brands Home & Security Inc (NYSE:FBHS). Matthew Tewksbury’s Stevens Capital Management also made an $11.1 million investment in the stock during the quarter. The following funds were also among the new FBHS investors: Andrew Sandler’s Sandler Capital Management, Alec Litowitz and Ross Laser’s Magnetar Capital, and Neil Chriss’ Hutchin Hill Capital.
Let’s now take a look at hedge fund activity in other stocks similar to Fortune Brands Home & Security Inc (NYSE:FBHS). These stocks are CBRE Group Inc (NYSE:CBG), ResMed Inc. (NYSE:RMD), Shaw Communications Inc (USA) (NYSE:SJR), and Cheniere Energy, Inc. (NYSEAMEX:LNG). This group of stocks’ market valuations resemble FBHS’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CBG | 34 | 1890453 | 6 |
| RMD | 17 | 204914 | 2 |
| SJR | 9 | 114682 | -3 |
| LNG | 45 | 4735418 | 3 |
As you can see these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $1.74 billion. That figure was $332 million in FBHS’s case. Cheniere Energy, Inc. (NYSEAMEX:LNG) is the most popular stock in this table. On the other hand Shaw Communications Inc (USA) (NYSE:SJR) is the least popular one with only 9 bullish hedge fund positions. Fortune Brands Home & Security Inc (NYSE:FBHS) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard LNG might be a better candidate to consider a long position.
Disclosure: None
