Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 900 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Ingersoll Rand Inc. (NYSE:IR).
Is IR a good stock to buy now? Ingersoll Rand Inc. (NYSE:IR) shareholders have witnessed an increase in activity from the world’s largest hedge funds recently. Ingersoll Rand Inc. (NYSE:IR) was in 33 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 47. Our calculations also showed that IR isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Andreas Halvorsen of Viking Global
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. Keeping this in mind let’s go over the new hedge fund action surrounding Ingersoll Rand Inc. (NYSE:IR).
Do Hedge Funds Think IR Is A Good Stock To Buy Now?
At the end of September, a total of 33 of the hedge funds tracked by Insider Monkey were long this stock, a change of 6% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in IR over the last 25 quarters. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Andreas Halvorsen’s Viking Global has the largest position in Ingersoll Rand Inc. (NYSE:IR), worth close to $183.5 million, accounting for 0.5% of its total 13F portfolio. The second most bullish fund manager is Adage Capital Management, led by Phill Gross and Robert Atchinson, holding a $129.1 million position; 0.3% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors that hold long positions include Brandon Haley’s Holocene Advisors, Zach Schreiber’s Point State Capital and Joe Milano’s Greenhouse Funds. In terms of the portfolio weights assigned to each position Greenhouse Funds allocated the biggest weight to Ingersoll Rand Inc. (NYSE:IR), around 3.92% of its 13F portfolio. Goodnow Investment Group is also relatively very bullish on the stock, dishing out 2.59 percent of its 13F equity portfolio to IR.
As industrywide interest jumped, key hedge funds were leading the bulls’ herd. Point State Capital, managed by Zach Schreiber, created the biggest position in Ingersoll Rand Inc. (NYSE:IR). Point State Capital had $84.4 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also initiated a $13.3 million position during the quarter. The other funds with new positions in the stock are Louis Bacon’s Moore Global Investments, Anand Parekh’s Alyeska Investment Group, and Jinghua Yan’s TwinBeech Capital.
Let’s check out hedge fund activity in other stocks similar to Ingersoll Rand Inc. (NYSE:IR). These stocks are Steris Plc (NYSE:STE), The Cooper Companies, Inc. (NYSE:COO), Regions Financial Corporation (NYSE:RF), The Clorox Company (NYSE:CLX), Cenovus Energy Inc (NYSE:CVE), Church & Dwight Co., Inc. (NYSE:CHD), and Expeditors International of Washington (NASDAQ:EXPD). This group of stocks’ market values match IR’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| STE | 34 | 1733011 | -1 |
| COO | 37 | 1403322 | 4 |
| RF | 28 | 204669 | -5 |
| CLX | 34 | 971875 | -3 |
| CVE | 30 | 717847 | -2 |
| CHD | 20 | 1362889 | -15 |
| EXPD | 26 | 452843 | -3 |
| Average | 29.9 | 978065 | -3.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.9 hedge funds with bullish positions and the average amount invested in these stocks was $978 million. That figure was $733 million in IR’s case. The Cooper Companies, Inc. (NYSE:COO) is the most popular stock in this table. On the other hand Church & Dwight Co., Inc. (NYSE:CHD) is the least popular one with only 20 bullish hedge fund positions. Ingersoll Rand Inc. (NYSE:IR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for IR is 66.3. 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 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Hedge funds were also right about betting on IR as the stock returned 15.8% since the end of Q3 (through 11/30) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Ingersoll Rand Inc. (NYSE:IR)
Follow Ingersoll Rand Inc. (NYSE:IR)
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Disclosure: None. This article was originally published at Insider Monkey.
