Is Newell Brands Inc. (NWL) A Good Stock To Buy?

As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the fourth quarter of 2019. A significant number of hedge funds continued their strong performance in 2020 and 2021 as well. We get to see hedge funds’ thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Newell Brands Inc. (NASDAQ:NWL).

Is NWL a good stock to buy? Newell Brands Inc. (NASDAQ:NWL) shareholders have witnessed an increase in hedge fund sentiment recently. Newell Brands Inc. (NASDAQ:NWL) was in 26 hedge funds’ portfolios at the end of September. The all time high for this statistic is 51. There were 25 hedge funds in our database with NWL positions at the end of the second quarter. Our calculations also showed that NWL isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

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. Now let’s take a peek at the fresh hedge fund action encompassing Newell Brands Inc. (NASDAQ:NWL).

David E. Shaw of D.E. Shaw

Do Hedge Funds Think NWL Is A Good Stock To Buy Now?

Heading into the fourth quarter of 2021, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 4% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards NWL over the last 25 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Carl Icahn’s Icahn Capital LP has the most valuable position in Newell Brands Inc. (NASDAQ:NWL), worth close to $967.6 million, comprising 4.3% of its total 13F portfolio. The second largest stake is held by Richard S. Pzena of Pzena Investment Management, with a $579.3 million position; the fund has 2.3% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that are bullish contain D. E. Shaw’s D E Shaw, Cliff Asness’s AQR Capital Management and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Icahn Capital LP allocated the biggest weight to Newell Brands Inc. (NASDAQ:NWL), around 4.3% of its 13F portfolio. Southport Management is also relatively very bullish on the stock, setting aside 3.79 percent of its 13F equity portfolio to NWL.

As aggregate interest increased, key hedge funds were leading the bulls’ herd. Sciencast Management, managed by Qing Li, assembled the biggest position in Newell Brands Inc. (NASDAQ:NWL). Sciencast Management had $1.6 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also made a $1.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Greg Poole’s Echo Street Capital Management, Paul Tudor Jones’s Tudor Investment Corp, and Matthew Hulsizer’s PEAK6 Capital Management.

Let’s now take a look at hedge fund activity in other stocks similar to Newell Brands Inc. (NASDAQ:NWL). We will take a look at Texas Pacific Land Corporation (NYSE:TPL), Life Storage, Inc. (NYSE:LSI), Cree, Inc. (NASDAQ:CREE), Lear Corporation (NYSE:LEA), Banco de Chile (NYSE:BCH), ICL Group Ltd. (NYSE:ICL), and Erie Indemnity Company (NASDAQ:ERIE). This group of stocks’ market caps are similar to NWL’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.3 hedge funds with bullish positions and the average amount invested in these stocks was $559 million. That figure was $1636 million in NWL’s case. Lear Corporation (NYSE:LEA) is the most popular stock in this table. On the other hand ICL Group Ltd. (NYSE:ICL) is the least popular one with only 6 bullish hedge fund positions. Newell Brands Inc. (NASDAQ:NWL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NWL is 59.8. 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 31.1% in 2021 through December 9th and beat the market again by 5.1 percentage points. Unfortunately NWL wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on NWL were disappointed as the stock returned 4% since the end of September (through 12/9) 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.