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 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. Hedge funds’ consensus stock picks performed spectacularly over the last 3 years, but 2022 hasn’t been kind to hedge funds. In this article we look at how hedge funds traded International Flavors & Fragrances Inc (NYSE:IFF) and determine whether the smart money was really smart about this stock.
International Flavors & Fragrances Inc (NYSE:IFF) has seen a decrease in support from the world’s most elite money managers lately. International Flavors & Fragrances Inc (NYSE:IFF) was in 46 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 55. Our calculations also showed that IFF 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 we’re going to take a peek at the recent hedge fund action regarding International Flavors & Fragrances Inc (NYSE:IFF).
Scott Ferguson of Sachem Head Capital
Do Hedge Funds Think IFF Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 46 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -12% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in IFF over the last 25 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.
Among these funds, Sachem Head Capital held the most valuable stake in International Flavors & Fragrances Inc (NYSE:IFF), which was worth $870.4 million at the end of the third quarter. On the second spot was Laurion Capital Management which amassed $482 million worth of shares. Baupost Group, First Pacific Advisors LLC, and Gates Capital 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 Sachem Head Capital allocated the biggest weight to International Flavors & Fragrances Inc (NYSE:IFF), around 21.46% of its 13F portfolio. Albar Capital is also relatively very bullish on the stock, dishing out 12.72 percent of its 13F equity portfolio to IFF.
Judging by the fact that International Flavors & Fragrances Inc (NYSE:IFF) has faced declining sentiment from the smart money, logic holds that there was a specific group of fund managers who were dropping their full holdings by the end of the third quarter. It’s worth mentioning that Andreas Halvorsen’s Viking Global dropped the largest investment of the 750 funds monitored by Insider Monkey, valued at close to $76 million in stock. D. E. Shaw’s fund, D E Shaw, also said goodbye to its stock, about $67.9 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 6 funds by the end of the third quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as International Flavors & Fragrances Inc (NYSE:IFF) but similarly valued. We will take a look at CoStar Group Inc (NASDAQ:CSGP), PPG Industries, Inc. (NYSE:PPG), BeiGene, Ltd. (NASDAQ:BGNE), Xcel Energy Inc (NASDAQ:XEL), The Trade Desk, Inc. (NASDAQ:TTD), Archer Daniels Midland Company (NYSE:ADM), and Old Dominion Freight Line, Inc. (NASDAQ:ODFL). This group of stocks’ market valuations match IFF’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CSGP | 29 | 2585035 | -20 |
| PPG | 30 | 318414 | 4 |
| BGNE | 16 | 6418381 | -5 |
| XEL | 26 | 498007 | 4 |
| TTD | 19 | 499103 | -6 |
| ADM | 27 | 351486 | -14 |
| ODFL | 33 | 709810 | -14 |
| Average | 25.7 | 1625748 | -7.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.7 hedge funds with bullish positions and the average amount invested in these stocks was $1626 million. That figure was $2838 million in IFF’s case. Old Dominion Freight Line, Inc. (NASDAQ:ODFL) is the most popular stock in this table. On the other hand BeiGene, Ltd. (NASDAQ:BGNE) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks International Flavors & Fragrances Inc (NYSE:IFF) is more popular among hedge funds. Our overall hedge fund sentiment score for IFF is 74.1. 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. Unfortunately, IFF wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on IFF were disappointed as the stock returned -0.8% since the end of the third quarter (through 1/31) 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 all of these stocks already outperformed the market since 2019.
Follow International Flavors & Fragrances Inc (NYSE:IFF)
Follow International Flavors & Fragrances Inc (NYSE:IFF)
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Disclosure: None. This article was originally published at Insider Monkey.
