Does Masco Corporation (NYSE:MAS) represent a good buying opportunity at the moment? Let’s quickly check the hedge fund interest towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on satellite photos and other research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail inconceivably on some occasions, but net net their stock picks have been generating superior risk-adjusted returns on average over the years.
Is Masco Corporation (NYSE:MAS) worth your attention right now? The smart money is betting on the stock. The number of long hedge fund positions improved by 6 recently. Our calculations also showed that mas isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are a lot of formulas shareholders can use to assess publicly traded companies. Two of the less known formulas are hedge fund and insider trading moves. We have shown that, historically, those who follow the top picks of the top money managers can outperform the S&P 500 by a significant margin (see the details here).
Noam Gottesman, GLG Partners
We’re going to take a glance at the new hedge fund action encompassing Masco Corporation (NYSE:MAS).
What does the smart money think about Masco Corporation (NYSE:MAS)?
At the end of the first quarter, a total of 40 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 18% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in MAS over the last 15 quarters. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
Among these funds, Two Sigma Advisors held the most valuable stake in Masco Corporation (NYSE:MAS), which was worth $197.4 million at the end of the first quarter. On the second spot was Millennium Management which amassed $173.4 million worth of shares. Moreover, Citadel Investment Group, Point72 Asset Management, and GLG Partners were also bullish on Masco Corporation (NYSE:MAS), allocating a large percentage of their portfolios to this stock.
Consequently, key money managers were breaking ground themselves. Scopus Asset Management, managed by Alexander Mitchell, initiated the most outsized position in Masco Corporation (NYSE:MAS). Scopus Asset Management had $38.3 million invested in the company at the end of the quarter. Jeffrey Talpins’s Element Capital Management also made a $13.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Clint Carlson’s Carlson Capital, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Matthew Tewksbury’s Stevens Capital Management.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Masco Corporation (NYSE:MAS) but similarly valued. We will take a look at IDEX Corporation (NYSE:IEX), Campbell Soup Company (NYSE:CPB), Apollo Global Management LLC (NYSE:APO), and StoneCo Ltd. (NASDAQ:STNE). This group of stocks’ market caps match MAS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| IEX | 16 | 321069 | -3 |
| CPB | 28 | 1032966 | -1 |
| APO | 18 | 1406351 | -4 |
| STNE | 23 | 1735395 | 3 |
| Average | 21.25 | 1123945 | -1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.25 hedge funds with bullish positions and the average amount invested in these stocks was $1124 million. That figure was $1105 million in MAS’s case. Campbell Soup Company (NYSE:CPB) is the most popular stock in this table. On the other hand IDEX Corporation (NYSE:IEX) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Masco Corporation (NYSE:MAS) is more popular among hedge funds. 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 MAS wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on MAS were disappointed as the stock returned -8.6% during the same 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 in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
