A market surge in the first quarter, spurred by easing global macroeconomic concerns and Powell’s pivot ended up having a positive impact on the markets and many hedge funds as a result. The stocks of smaller companies which were especially hard hit during the fourth quarter slightly outperformed the market during the first quarter. Unfortunately, Trump is unpredictable and volatility returned in the second quarter and smaller-cap stocks went back to selling off. We finished compiling the latest 13F filings to get an idea about what hedge funds are thinking about the overall market as well as individual stocks. In this article we will study the hedge fund sentiment to see how those concerns affected their ownership of Jones Lang LaSalle Inc (NYSE:JLL) during the quarter.
Jones Lang LaSalle Inc (NYSE:JLL) was in 23 hedge funds’ portfolios at the end of March. JLL has seen an increase in activity from the world’s largest hedge funds in recent months. There were 19 hedge funds in our database with JLL positions at the end of the previous quarter. Our calculations also showed that jll isn’t among the 30 most popular stocks among hedge funds.
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’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s take a peek at the new hedge fund action encompassing Jones Lang LaSalle Inc (NYSE:JLL).
What does the smart money think about Jones Lang LaSalle Inc (NYSE:JLL)?
At the end of the first quarter, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 21% from the fourth quarter of 2018. The graph below displays the number of hedge funds with bullish position in JLL over the last 15 quarters. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Generation Investment Management, managed by David Blood and Al Gore, holds the number one position in Jones Lang LaSalle Inc (NYSE:JLL). Generation Investment Management has a $659.3 million position in the stock, comprising 4.8% of its 13F portfolio. On Generation Investment Management’s heels is John W. Rogers of Ariel Investments, with a $111.6 million position; 1.4% of its 13F portfolio is allocated to the stock. Some other hedge funds and institutional investors with similar optimism contain Ric Dillon’s Diamond Hill Capital, Ken Heebner’s Capital Growth Management and James Parsons’s Junto Capital Management.
As aggregate interest increased, key money managers were breaking ground themselves. Capital Growth Management, managed by Ken Heebner, established the most valuable position in Jones Lang LaSalle Inc (NYSE:JLL). Capital Growth Management had $37 million invested in the company at the end of the quarter. James Parsons’s Junto Capital Management also made a $33.4 million investment in the stock during the quarter. The following funds were also among the new JLL investors: Jim Simons’s Renaissance Technologies, Dmitry Balyasny’s Balyasny Asset Management, and Joel Greenblatt’s Gotham Asset Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Jones Lang LaSalle Inc (NYSE:JLL) but similarly valued. These stocks are Berry Global Group Inc (NYSE:BERY), Carlisle Companies, Inc. (NYSE:CSL), Charles River Laboratories International Inc. (NYSE:CRL), and The Madison Square Garden Company (NYSE:MSG). This group of stocks’ market caps are similar to JLL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BERY | 40 | 2602301 | -3 |
| CSL | 22 | 251859 | 1 |
| CRL | 24 | 994211 | -4 |
| MSG | 52 | 1778621 | 6 |
| Average | 34.5 | 1406748 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 34.5 hedge funds with bullish positions and the average amount invested in these stocks was $1407 million. That figure was $940 million in JLL’s case. The Madison Square Garden Company (NYSE:MSG) is the most popular stock in this table. On the other hand Carlisle Companies, Inc. (NYSE:CSL) is the least popular one with only 22 bullish hedge fund positions. Jones Lang LaSalle Inc (NYSE:JLL) 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately JLL wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); JLL investors were disappointed as the stock returned -17.4% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
