Should I Avoid FMC Corporation (FMC)?

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of FMC Corporation (NYSE:FMC) based on that data.

Is FMC Corporation (NYSE:FMC) a buy right now? The best stock pickers were in a pessimistic mood. The number of bullish hedge fund positions shrunk by 5 lately. FMC Corporation (NYSE:FMC) was in 28 hedge funds’ portfolios at the end of September. The all time high for this statistic is 46. Our calculations also showed that FMC 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 we’re going to take a look at the key hedge fund action regarding FMC Corporation (NYSE:FMC).

Zilvinas Mecelis of Covalis Capital

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

At Q3’s end, a total of 28 of the hedge funds tracked by Insider Monkey were long this stock, a change of -15% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards FMC over the last 25 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Cardinal Capital, managed by Amy Minella, holds the number one position in FMC Corporation (NYSE:FMC). Cardinal Capital has a $85.2 million position in the stock, comprising 2% of its 13F portfolio. Coming in second is Glenview Capital, managed by Larry Robbins, which holds a $70.7 million position; the fund has 1.3% of its 13F portfolio invested in the stock. Some other peers with similar optimism encompass D. E. Shaw’s D E Shaw, Charles Paquelet’s Skylands Capital and Andrew Kurita’s Kettle Hill Capital Management. In terms of the portfolio weights assigned to each position Kettle Hill Capital Management allocated the biggest weight to FMC Corporation (NYSE:FMC), around 4.04% of its 13F portfolio. Skylands Capital is also relatively very bullish on the stock, earmarking 3.03 percent of its 13F equity portfolio to FMC.

Seeing as FMC Corporation (NYSE:FMC) has witnessed bearish sentiment from the aggregate hedge fund industry, logic holds that there was a specific group of fund managers that slashed their entire stakes last quarter. Interestingly, Ray Dalio’s Bridgewater Associates dumped the biggest stake of the “upper crust” of funds monitored by Insider Monkey, worth close to $4.8 million in stock, and John Nevin Jr’s Ayrshire Capital Management was right behind this move, as the fund sold off about $4 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 5 funds last quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as FMC Corporation (NYSE:FMC) but similarly valued. These stocks are InterContinental Hotels Group PLC (NYSE:IHG), Trex Company, Inc. (NYSE:TREX), Procore Technologies Inc. (NYSE:PCOR), Westlake Chemical Corporation (NYSE:WLK), Host Hotels and Resorts Inc (NASDAQ:HST), Darling Ingredients Inc. (NYSE:DAR), and Dropbox, Inc. (NASDAQ:DBX). This group of stocks’ market caps resemble FMC’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 25.7 hedge funds with bullish positions and the average amount invested in these stocks was $658 million. That figure was $350 million in FMC’s case. Dropbox, Inc. (NASDAQ:DBX) is the most popular stock in this table. On the other hand InterContinental Hotels Group PLC (NYSE:IHG) is the least popular one with only 9 bullish hedge fund positions. FMC Corporation (NYSE:FMC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FMC is 47.9. 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 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 still beat the market by 5.1 percentage points. Hedge funds were also right about betting on FMC as the stock returned 17.3% since the end of Q3 (through 12/9) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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Disclosure: None. This article was originally published at Insider Monkey.