The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors endured a torrid quarter, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards USG Corporation (NYSE:USG).
Is USG Corporation (NYSE:USG) the right investment to pursue these days? The smart money is selling. The number of long hedge fund bets retreated by 1 lately. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as The Toro Company (NYSE:TTC), Hospitality Properties Trust (NYSE:HPT), and Graco Inc. (NYSE:GGG) to gather more data points.
Follow Usg Corp (NYSE:USG)
Follow Usg Corp (NYSE:USG)
If you’d ask most shareholders, hedge funds are assumed to be worthless, outdated investment vehicles of the past. While there are greater than an 8000 funds trading at present, Our researchers look at the crème de la crème of this group, around 700 funds. These investment experts preside over most of all hedge funds’ total capital, and by shadowing their inimitable investments, Insider Monkey has brought to light several investment strategies that have historically defeated the broader indices. Insider Monkey’s small-cap hedge fund strategy outpaced the S&P 500 index by 12 percentage points per annum for a decade in their back tests.
Keeping this in mind, let’s go over the fresh action encompassing USG Corporation (NYSE:USG).
How have hedgies been trading USG Corporation (NYSE:USG)?
At the end of the third quarter, a total of 28 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -3% from the second quarter. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Berkshire Hathaway, managed by Warren Buffett, holds the biggest position in USG Corporation (NYSE:USG). Berkshire Hathaway has a $1.0382 billion position in the stock, comprising 0.8% of its 13F portfolio. Sitting at the No. 2 spot is Appaloosa Management LP, led by David Tepper, holding a $28.9 million position; the fund has 1% of its 13F portfolio invested in the stock. Remaining members of the smart money with similar optimism encompass Lee Munder’s Lee Munder Capital Group, Israel Englander’s Millennium Management and Thomas E. Claugus’ GMT Capital.
Judging by the fact that USG Corporation (NYSE:USG) has witnessed a declination in interest from the smart money, we can see that there was a specific group of fund managers that elected to cut their entire stakes by the end of the third quarter. At the top of the heap, Jeffrey Gates’ Gates Capital Management cut the largest stake of the “upper crust” of funds watched by Insider Monkey, totaling an estimated $43.3 million in call options. Andrew Sandler’s fund, Sandler Capital Management, also dropped its call options, about $9.7 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 1 funds by the end of the third quarter.
Let’s go over hedge fund activity in other stocks similar to USG Corporation (NYSE:USG). We will take a look at The Toro Company (NYSE:TTC), Hospitality Properties Trust (NYSE:HPT), Graco Inc. (NYSE:GGG), and NCR Corporation (NYSE:NCR). This group of stocks’ market values are similar to USG’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TTC | 21 | 184000 | -1 |
| HPT | 17 | 77923 | 1 |
| GGG | 16 | 154015 | 7 |
| NCR | 42 | 1017246 | -2 |
As you can see these stocks had an average of 24 hedge funds with bullish positions and the average amount invested in these stocks was $358 million. That figure was $1221 million in USG’s case. NCR Corporation (NYSE:NCR) is the most popular stock in this table. On the other hand Graco Inc. (NYSE:GGG) is the least popular one with only 16 bullish hedge fund positions. USG Corporation (NYSE:USG) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard NCR might be a better candidate to consider a long position.
