While the market driven by short-term sentiment influenced by the accommodative interest rate environment in the US, virus news and stimulus spending, many smart money investors are starting to get cautious towards the current bull run since March and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 40,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding FMC Corporation (NYSE:FMC).
FMC Corporation (NYSE:FMC) was in 45 hedge funds’ portfolios at the end of December. The all time high for this statistic is 46. FMC investors should be aware of an increase in support from the world’s most elite money managers in recent months. There were 41 hedge funds in our database with FMC holdings at the end of September. Our calculations also showed that FMC isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
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Larry Robbins of Glenview Capital
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Do Hedge Funds Think FMC Is A Good Stock To Buy Now?
Heading into the first quarter of 2021, a total of 45 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 10% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards FMC over the last 22 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
Among these funds, Pelham Capital held the most valuable stake in FMC Corporation (NYSE:FMC), which was worth $120 million at the end of the fourth quarter. On the second spot was Cardinal Capital which amassed $96 million worth of shares. Glenview Capital, D E Shaw, and Millennium Management 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 Covalis Capital allocated the biggest weight to FMC Corporation (NYSE:FMC), around 7.99% of its 13F portfolio. Pelham Capital is also relatively very bullish on the stock, setting aside 7.94 percent of its 13F equity portfolio to FMC.
With a general bullishness amongst the heavyweights, key hedge funds have been driving this bullishness. Covalis Capital, managed by Zilvinas Mecelis, established the most outsized position in FMC Corporation (NYSE:FMC). Covalis Capital had $21.8 million invested in the company at the end of the quarter. Lee Ainslie’s Maverick Capital also initiated a $1.9 million position during the quarter. The other funds with brand new FMC positions are Mika Toikka’s AlphaCrest Capital Management, Jinghua Yan’s TwinBeech Capital, and Phil Frohlich’s Prescott Group Capital Management.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as FMC Corporation (NYSE:FMC) but similarly valued. We will take a look at Fair Isaac Corporation (NYSE:FICO), Duke Realty Corporation (NYSE:DRE), NetApp Inc. (NASDAQ:NTAP), Masimo Corporation (NASDAQ:MASI), Oak Street Health, Inc. (NYSE:OSH), Boston Properties, Inc. (NYSE:BXP), and ABIOMED, Inc. (NASDAQ:ABMD). This group of stocks’ market valuations match FMC’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FICO | 38 | 1404904 | -5 |
| DRE | 17 | 203716 | -5 |
| NTAP | 34 | 582659 | 3 |
| MASI | 29 | 271991 | 2 |
| OSH | 34 | 656774 | 12 |
| BXP | 30 | 231792 | 4 |
| ABMD | 23 | 999083 | -2 |
| Average | 29.3 | 621560 | 1.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.3 hedge funds with bullish positions and the average amount invested in these stocks was $622 million. That figure was $572 million in FMC’s case. Fair Isaac Corporation (NYSE:FICO) is the most popular stock in this table. On the other hand Duke Realty Corporation (NYSE:DRE) is the least popular one with only 17 bullish hedge fund positions. Compared to these stocks FMC Corporation (NYSE:FMC) is more popular among hedge funds. Our overall hedge fund sentiment score for FMC is 88.3. 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 10 most popular stocks among hedge funds returned 90.7% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 35 percentage points. These stocks gained 13.6% in 2021 through April 30th and still beat the market by 1.6 percentage points. Unfortunately FMC wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on FMC were disappointed as the stock returned 3.3% since the end of the fourth quarter (through 4/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
