Should I Avoid Jones Lang LaSalle Inc (JLL)?

Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 900 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Jones Lang LaSalle Inc (NYSE:JLL).

Is Jones Lang LaSalle Inc (NYSE:JLL) the right investment to pursue these days? Hedge funds were turning less bullish. The number of long hedge fund positions were trimmed by 1 lately. Jones Lang LaSalle Inc (NYSE:JLL) was in 30 hedge funds’ portfolios at the end of September. The all time high for this statistic is 31. Our calculations also showed that JLL 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. Keeping this in mind we’re going to take a glance at the latest hedge fund action regarding Jones Lang LaSalle Inc (NYSE:JLL).

Lee Ainslie of Maverick Capital

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

At the end of September, a total of 30 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -3% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in JLL over the last 25 quarters. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

More specifically, Generation Investment Management was the largest shareholder of Jones Lang LaSalle Inc (NYSE:JLL), with a stake worth $1153.3 million reported as of the end of September. Trailing Generation Investment Management was Ariel Investments, which amassed a stake valued at $279.5 million. Maverick Capital, Samlyn Capital, and Senator Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Capital Growth Management allocated the biggest weight to Jones Lang LaSalle Inc (NYSE:JLL), around 6.49% of its 13F portfolio. Generation Investment Management is also relatively very bullish on the stock, dishing out 4.79 percent of its 13F equity portfolio to JLL.

Judging by the fact that Jones Lang LaSalle Inc (NYSE:JLL) has experienced falling interest from hedge fund managers, we can see that there is a sect of money managers that elected to cut their entire stakes heading into Q4. At the top of the heap, Matthew Stadelman’s Diamond Hill Capital dropped the biggest position of all the hedgies monitored by Insider Monkey, totaling close to $27.5 million in stock. Ben Levine, Andrew Manuel and Stefan Renold’s fund, LMR Partners, also dumped its stock, about $17.6 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 1 funds heading into Q4.

Let’s go over hedge fund activity in other stocks similar to Jones Lang LaSalle Inc (NYSE:JLL). We will take a look at Iron Mountain Incorporated (NYSE:IRM), Enel Americas S.A. (NYSE:ENIA), Tenaris S.A. (NYSE:TS), Opendoor Technologies Inc. (NASDAQ:OPEN), Fortune Brands Home & Security Inc (NYSE:FBHS), American Homes 4 Rent (NYSE:AMH), and Hasbro, Inc. (NASDAQ:HAS). This group of stocks’ market valuations resemble JLL’s market valuation.

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As you can see these stocks had an average of 22.9 hedge funds with bullish positions and the average amount invested in these stocks was $477 million. That figure was $2108 million in JLL’s case. Opendoor Technologies Inc. (NASDAQ:OPEN) is the most popular stock in this table. On the other hand Enel Americas S.A. (NYSE:ENIA) is the least popular one with only 9 bullish hedge fund positions. Jones Lang LaSalle Inc (NYSE:JLL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for JLL is 73.4. 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately JLL wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on JLL were disappointed as the stock returned -5.3% since the end of September (through 11/30) 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.