At Insider Monkey we follow around 730 of the best-performing investors and even though many of them lost money in the last several months, history teaches us that over the long-run they still manage to beat the market, which is why it can be profitable for us to imitate their activity. Of course, even the best money managers can sometimes get it wrong, but following some of their picks gives us a better chance to outperform the crowd than picking a random stock and this is where our research comes in.
Is Lennar Corporation (NYSE:LEN) an exceptional investment today? Investors who are in the know are getting more optimistic. The number of bullish hedge fund bets moved up by 5 recently. 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 Juniper Networks, Inc. (NYSE:JNPR), EQT Corporation (NYSE:EQT), and Mobileye NV (NYSE:MBLY) to gather more data points.
Follow Lennar Corp W (NYSE:LEN, LEN.B)
Follow Lennar Corp W (NYSE:LEN, LEN.B)
In the 21st century investor’s toolkit there are tons of tools shareholders put to use to value stocks. A duo of the most under-the-radar tools are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the top picks of the top hedge fund managers can trounce the S&P 500 by a solid amount (see the details here).
With all of this in mind, we’re going to take a look at the latest action surrounding Lennar Corporation (NYSE:LEN).
How are hedge funds trading Lennar Corporation (NYSE:LEN)?
At the end of the third quarter, a total of 49 of the hedge funds tracked by Insider Monkey were long this stock, an 11% rise from the previous quarter. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Capital Growth Management, managed by Ken Heebner, holds the largest position in Lennar Corporation (NYSE:LEN). Capital Growth Management has a $326.3 million position in the stock, comprising 10.5% of its 13F portfolio. Sitting in the 2 spot is Citadel Investment Group, led by Ken Griffin, holding a $100.5 million position; 0.1% of its 13F portfolio is allocated to the stock. Other members of the smart money that are bullish encompass Ross Margolies’ Stelliam Investment Management, Mario Gabelli’s GAMCO Investors, and Bruce Kovner’s Caxton Associates LP.
As industrywide interest jumped, key money managers have been driving this bullishness. MD Sass, managed by Martin D. Sass, initiated the largest position in Lennar Corporation (NYSE:LEN). MD Sass had $27 million invested in the company at the end of the quarter. Greg Poole’s Echo Street Capital Management also initiated a $13.2 million position during the quarter. The other funds with brand new LEN positions are William Harnisch’s Peconic Partners LLC, Clifford Fox’s Columbus Circle Investors, and Steve Cohen’s Point72 Asset Management.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Lennar Corporation (NYSE:LEN) but similarly valued. These stocks are Juniper Networks, Inc. (NYSE:JNPR), EQT Corporation (NYSE:EQT), Mobileye NV (NYSE:MBLY), and Ally Financial Inc (NYSE:ALLY). This group of stocks’ market valuations match LEN’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| JNPR | 41 | 928212 | -4 |
| EQT | 39 | 922108 | 2 |
| MBLY | 32 | 704976 | -7 |
| ALLY | 57 | 3532229 | 1 |
As you can see these stocks had an average of 42.25 hedge funds with bullish positions and the average amount invested in these stocks was $1.52 billion. That figure was $1.11 billion in LEN’s case. Ally Financial Inc (NYSE:ALLY) is the most popular stock in this table. On the other hand Mobileye NV (NYSE:MBLY) is the least popular one with only 32 bullish hedge fund positions. Lennar Corporation (NYSE:LEN) is not the most popular stock in this group but hedge fund interest is still above average and rising. This is a positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ALLY might be a better candidate to consider a long position in at this time.
