The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 867 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 September 30th, when the S&P 500 Index was trading around the 4300 level. Since then investors decided to bet on the economic recovery and a stock market rebound even though we experienced a temporary correction in January. In this article you are going to find out whether hedge funds thought McCormick & Company, Incorporated (NYSE:MKC) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.
McCormick & Company, Incorporated (NYSE:MKC) was in 35 hedge funds’ portfolios at the end of September. The all time high for this statistic is 37. MKC has experienced an increase in hedge fund interest lately. There were 34 hedge funds in our database with MKC positions at the end of the second quarter. Our calculations also showed that MKC 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. With all of this in mind let’s check out the key hedge fund action encompassing McCormick & Company, Incorporated (NYSE:MKC).
Cliff Asness of AQR Capital Management
Do Hedge Funds Think MKC Is A Good Stock To Buy Now?
At the end of the third quarter, 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. By comparison, 37 hedge funds held shares or bullish call options in MKC a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Fundsmith LLP held the most valuable stake in McCormick & Company, Incorporated (NYSE:MKC), which was worth $1516.4 million at the end of the third quarter. On the second spot was Impax Asset Management which amassed $53.1 million worth of shares. Millennium Management, AQR Capital Management, and Renaissance Technologies 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 Fundsmith LLP allocated the biggest weight to McCormick & Company, Incorporated (NYSE:MKC), around 4.19% of its 13F portfolio. Sciencast Management is also relatively very bullish on the stock, dishing out 0.63 percent of its 13F equity portfolio to MKC.
Consequently, key money managers have jumped into McCormick & Company, Incorporated (NYSE:MKC) headfirst. Select Equity Group, managed by Robert Joseph Caruso, created the most outsized position in McCormick & Company, Incorporated (NYSE:MKC). Select Equity Group had $8.9 million invested in the company at the end of the quarter. Qing Li’s Sciencast Management also made a $2.2 million investment in the stock during the quarter. The following funds were also among the new MKC investors: Paul Tudor Jones’s Tudor Investment Corp, Ran Pang’s Quantamental Technologies, and Matthew Hulsizer’s PEAK6 Capital Management.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as McCormick & Company, Incorporated (NYSE:MKC) but similarly valued. We will take a look at DTE Energy Company (NYSE:DTE), FleetCor Technologies, Inc. (NYSE:FLT), Dollar Tree, Inc. (NASDAQ:DLTR), TransUnion (NYSE:TRU), Mid America Apartment Communities Inc (NYSE:MAA), PPL Corporation (NYSE:PPL), and Sun Communities Inc (NYSE:SUI). This group of stocks’ market values are closest to MKC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DTE | 22 | 426119 | -10 |
| FLT | 31 | 2095712 | -9 |
| DLTR | 38 | 1215394 | -4 |
| TRU | 38 | 2180644 | 3 |
| MAA | 22 | 254912 | 8 |
| PPL | 20 | 140767 | -3 |
| SUI | 33 | 794559 | 3 |
| Average | 29.1 | 1015444 | -1.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.1 hedge funds with bullish positions and the average amount invested in these stocks was $1015 million. That figure was $1782 million in MKC’s case. Dollar Tree, Inc. (NASDAQ:DLTR) is the most popular stock in this table. On the other hand PPL Corporation (NYSE:PPL) is the least popular one with only 20 bullish hedge fund positions. McCormick & Company, Incorporated (NYSE:MKC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MKC is 76. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. Hedge funds were also right about betting on MKC as the stock returned 24.8% since the end of Q3 (through 1/31) 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.
