Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards Whirlpool Corporation (NYSE:WHR) changed recently.
Is WHR stock a buy? Whirlpool Corporation (NYSE:WHR) has seen an increase in hedge fund interest in recent months. Whirlpool Corporation (NYSE:WHR) was in 32 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 38. Our calculations also showed that WHR isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 124 percentage points since March 2017 (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 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Tom Gayner of Markel Gayner Asset Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind let’s take a look at the latest hedge fund action regarding Whirlpool Corporation (NYSE:WHR).
Do Hedge Funds Think WHR Is A Good Stock To Buy Now?
Heading into the first quarter of 2021, a total of 32 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 14% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards WHR over the last 22 quarters. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
The largest stake in Whirlpool Corporation (NYSE:WHR) was held by Greenhaven Associates, which reported holding $502.2 million worth of stock at the end of December. It was followed by Lyrical Asset Management with a $284.4 million position. Other investors bullish on the company included Arrowstreet Capital, Markel Gayner Asset Management, and AQR Capital Management. In terms of the portfolio weights assigned to each position Greenhaven Associates allocated the biggest weight to Whirlpool Corporation (NYSE:WHR), around 9.46% of its 13F portfolio. Lyrical Asset Management is also relatively very bullish on the stock, setting aside 3.93 percent of its 13F equity portfolio to WHR.
There weren’t any hedge funds initiating brand new positions in the stock during the fourth quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Whirlpool Corporation (NYSE:WHR) but similarly valued. These stocks are Kirkland Lake Gold Ltd. (NYSE:KL), Vail Resorts, Inc. (NYSE:MTN), Apollo Global Management Inc (NYSE:APO), Paylocity Holding Corp (NASDAQ:PCTY), Carlyle Group Inc (NASDAQ:CG), The Scotts Miracle-Gro Company (NYSE:SMG), and Bill.com Holdings, Inc. (NYSE:BILL). This group of stocks’ market valuations are closest to WHR’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| KL | 24 | 498090 | 2 |
| MTN | 31 | 937968 | 1 |
| APO | 30 | 2052942 | 2 |
| PCTY | 26 | 638940 | -1 |
| CG | 21 | 369178 | 7 |
| SMG | 29 | 454757 | -2 |
| BILL | 52 | 1993749 | 8 |
| Average | 30.4 | 992232 | 2.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.4 hedge funds with bullish positions and the average amount invested in these stocks was $992 million. That figure was $1051 million in WHR’s case. Bill.com Holdings, Inc. (NYSE:BILL) is the most popular stock in this table. On the other hand Carlyle Group Inc (NASDAQ:CG) is the least popular one with only 21 bullish hedge fund positions. Whirlpool Corporation (NYSE:WHR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for WHR is 52. 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. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.2% in 2021 through April 12th and still beat the market by 1.5 percentage points. Hedge funds were also right about betting on WHR as the stock returned 32.5% since the end of Q4 (through 4/12) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Whirlpool Corp (NYSE:WHR)
Follow Whirlpool Corp (NYSE:WHR)
Disclosure: None. This article was originally published at Insider Monkey.
