The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 866 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article we look at what those investors think of Huntsman Corporation (NYSE:HUN).
Is Huntsman Corporation (NYSE:HUN) the right pick for your portfolio? Hedge funds were getting more bullish. The number of long hedge fund bets increased by 6 lately. Huntsman Corporation (NYSE:HUN) was in 35 hedge funds’ portfolios at the end of March. The all time high for this statistic is 47. Our calculations also showed that HUN isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 29 hedge funds in our database with HUN holdings at the end of December.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Alexander Roepers of Atlantic Investment Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best battery 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. 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 homepage. With all of this in mind let’s take a look at the key hedge fund action surrounding Huntsman Corporation (NYSE:HUN).
Do Hedge Funds Think HUN Is A Good Stock To Buy Now?
At the end of March, a total of 35 of the hedge funds tracked by Insider Monkey were long this stock, a change of 21% from the fourth quarter of 2020. On the other hand, there were a total of 21 hedge funds with a bullish position in HUN a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Donald Yacktman’s Yacktman Asset Management has the biggest position in Huntsman Corporation (NYSE:HUN), worth close to $194.6 million, corresponding to 2% of its total 13F portfolio. Coming in second is Chuck Royce of Royce & Associates, with a $111 million position; the fund has 0.7% of its 13F portfolio invested in the stock. Some other members of the smart money that are bullish consist of Brandon Haley’s Holocene Advisors, D. E. Shaw’s D E Shaw and Paul Marshall and Ian Wace’s Marshall Wace LLP. In terms of the portfolio weights assigned to each position Atlantic Investment Management allocated the biggest weight to Huntsman Corporation (NYSE:HUN), around 8.23% of its 13F portfolio. MIK Capital is also relatively very bullish on the stock, designating 3.64 percent of its 13F equity portfolio to HUN.
As industrywide interest jumped, key hedge funds have been driving this bullishness. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, created the largest position in Huntsman Corporation (NYSE:HUN). Marshall Wace LLP had $40.9 million invested in the company at the end of the quarter. Alexander Roepers’s Atlantic Investment Management also initiated a $26.6 million position during the quarter. The other funds with brand new HUN positions are Ken Griffin’s Citadel Investment Group, Kamyar Khajavi’s MIK Capital, and Phill Gross and Robert Atchinson’s Adage Capital Management.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Huntsman Corporation (NYSE:HUN) but similarly valued. We will take a look at eXp World Holdings, Inc. (NASDAQ:EXPI), Apartment Income REIT Corp. (NYSE:AIRC), Sonoco Products Company (NYSE:SON), MDU Resources Group Inc (NYSE:MDU), WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC), Affiliated Managers Group, Inc. (NYSE:AMG), and Dada Nexus Limited (NASDAQ:DADA). All of these stocks’ market caps are closest to HUN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EXPI | 15 | 171695 | -5 |
| AIRC | 14 | 210803 | -3 |
| SON | 25 | 157746 | 5 |
| MDU | 21 | 162814 | 1 |
| WSC | 47 | 1271017 | 12 |
| AMG | 26 | 725024 | -1 |
| DADA | 21 | 157587 | -4 |
| Average | 24.1 | 408098 | 0.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.1 hedge funds with bullish positions and the average amount invested in these stocks was $408 million. That figure was $736 million in HUN’s case. WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) is the most popular stock in this table. On the other hand Apartment Income REIT Corp. (NYSE:AIRC) is the least popular one with only 14 bullish hedge fund positions. Huntsman Corporation (NYSE:HUN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HUN is 64.2. 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 19.3% in 2021 through June 25th and beat the market again by 4.8 percentage points. Unfortunately HUN wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on HUN were disappointed as the stock returned -6.1% since the end of March (through 6/25) 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.
Follow Huntsman Corp (NYSE:HUN)
Follow Huntsman Corp (NYSE:HUN)
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Disclosure: None. This article was originally published at Insider Monkey.
