The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of September 30th. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards International Paper Company (NYSE:IP).
Is International Paper Company (NYSE:IP) a buy, sell, or hold? Money managers were in a bearish mood. The number of long hedge fund positions were trimmed by 1 recently. International Paper Company (NYSE:IP) was in 30 hedge funds’ portfolios at the end of September. The all time high for this statistic is 36. Our calculations also showed that IP isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 31 hedge funds in our database with IP holdings at the end of June.
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. With all of this in mind we’re going to take a look at the fresh hedge fund action encompassing International Paper Company (NYSE:IP).
Sander Gerber of Hudson Bay Capital Management
Do Hedge Funds Think IP Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 30 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -3% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards IP over the last 25 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, AQR Capital Management held the most valuable stake in International Paper Company (NYSE:IP), which was worth $92.7 million at the end of the third quarter. On the second spot was D E Shaw which amassed $47.5 million worth of shares. Citadel Investment Group, Adage Capital Management, and Levin Easterly Partners 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 Appian Way Asset Management allocated the biggest weight to International Paper Company (NYSE:IP), around 6.63% of its 13F portfolio. Levin Easterly Partners is also relatively very bullish on the stock, dishing out 2.49 percent of its 13F equity portfolio to IP.
Since International Paper Company (NYSE:IP) has witnessed a decline in interest from the entirety of the hedge funds we track, it’s easy to see that there exists a select few fund managers who sold off their positions entirely heading into Q4. Intriguingly, Brandon Haley’s Holocene Advisors said goodbye to the largest position of the “upper crust” of funds followed by Insider Monkey, totaling about $2.6 million in stock, and Robert Vincent McHugh’s Jade Capital Advisors was right behind this move, as the fund cut about $2.5 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 1 funds heading into Q4.
Let’s also examine hedge fund activity in other stocks similar to International Paper Company (NYSE:IP). These stocks are Kellogg Company (NYSE:K), KE Holdings Inc (NYSE:BEKE), Ventas, Inc. (NYSE:VTR), McCormick & Company, Incorporated (NYSE:MKC), DTE Energy Company (NYSE:DTE), FleetCor Technologies, Inc. (NYSE:FLT), and Dollar Tree, Inc. (NASDAQ:DLTR). This group of stocks’ market valuations are similar to IP’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| K | 22 | 290019 | -10 |
| BEKE | 26 | 1740683 | -5 |
| VTR | 23 | 464641 | -2 |
| MKC | 35 | 1782097 | 1 |
| DTE | 22 | 426119 | -10 |
| FLT | 31 | 2095712 | -9 |
| DLTR | 38 | 1215394 | -4 |
| Average | 28.1 | 1144952 | -5.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.1 hedge funds with bullish positions and the average amount invested in these stocks was $1145 million. That figure was $263 million in IP’s case. Dollar Tree, Inc. (NASDAQ:DLTR) is the most popular stock in this table. On the other hand Kellogg Company (NYSE:K) is the least popular one with only 22 bullish hedge fund positions. International Paper Company (NYSE:IP) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for IP is 54. 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately IP wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on IP were disappointed as the stock returned -13.2% since the end of September (through 11/30) 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.
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Disclosure: None. This article was originally published at Insider Monkey.
