Is Vulcan Materials Company (NYSE:VMC) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is Vulcan Materials Company (NYSE:VMC) an exceptional investment today? Hedge funds are in an optimistic mood. The number of long hedge fund bets improved by 1 in recent months. Our calculations also showed that vmc isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We’re going to analyze the new hedge fund action encompassing Vulcan Materials Company (NYSE:VMC).
How are hedge funds trading Vulcan Materials Company (NYSE:VMC)?
At Q3’s end, a total of 35 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 3% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards VMC over the last 13 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Vulcan Materials Company (NYSE:VMC) was held by Eminence Capital, which reported holding $338.7 million worth of stock at the end of September. It was followed by Soroban Capital Partners with a $173 million position. Other investors bullish on the company included Citadel Investment Group, Millennium Management, and Interval Partners.
Consequently, specific money managers were breaking ground themselves. Soroban Capital Partners, managed by Eric W. Mandelblatt and Gaurav Kapadia, assembled the most outsized position in Vulcan Materials Company (NYSE:VMC). Soroban Capital Partners had $173 million invested in the company at the end of the quarter. Keith Meister’s Corvex Capital also made a $39.8 million investment in the stock during the quarter. The other funds with new positions in the stock are John Khoury’s Long Pond Capital, Alexander Mitchell’s Scopus Asset Management, and Ian Simm’s Impax Asset Management.
Let’s now take a look at hedge fund activity in other stocks similar to Vulcan Materials Company (NYSE:VMC). These stocks are Incyte Corporation (NASDAQ:INCY), Entergy Corporation (NYSE:ETR), Lincoln National Corporation (NYSE:LNC), and Synopsys, Inc. (NASDAQ:SNPS). This group of stocks’ market valuations are closest to VMC’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| INCY | 37 | 3254536 | 0 |
| ETR | 27 | 1329530 | 6 |
| LNC | 33 | 1001611 | 5 |
| SNPS | 30 | 1204856 | 2 |
| Average | 31.75 | 1697633 | 3.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.75 hedge funds with bullish positions and the average amount invested in these stocks was $1.70 billion. That figure was $1.34 billion in VMC’s case. Incyte Corporation (NASDAQ:INCY) is the most popular stock in this table. On the other hand Entergy Corporation (NYSE:ETR) is the least popular one with only 27 bullish hedge fund positions. Vulcan Materials Company (NYSE:VMC) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard INCY might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
