Were Hedge Funds Right About Linde plc (LIN)?

In this article we will check out the progression of hedge fund sentiment towards Linde plc (NYSE:LIN) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.

Is Linde plc (NYSE:LIN) a buy, sell, or hold? Prominent investors were turning bullish. The number of long hedge fund positions rose by 12 recently. Linde plc (NYSE:LIN) was in 55 hedge funds’ portfolios at the end of June. The all time high for this statistic is 60. Our calculations also showed that LIN isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 43 hedge funds in our database with LIN positions at the end of the first quarter.

In the 21st century investor’s toolkit there are dozens of metrics shareholders use to analyze their holdings. Some of the best metrics are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the top picks of the top investment managers can outperform the S&P 500 by a significant margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.

John Armitage of Egerton Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, the demand for helium is soaring and there is a helium supply shortage, so we are checking out stock pitches like this emerging helium stock. 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. 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. Keeping this in mind we’re going to take a peek at the recent hedge fund action surrounding Linde plc (NYSE:LIN).

Do Hedge Funds Think LIN Is A Good Stock To Buy Now?

At Q2’s end, a total of 55 of the hedge funds tracked by Insider Monkey were long this stock, a change of 28% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards LIN over the last 24 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 Linde plc (NYSE:LIN) was held by Ako Capital, which reported holding $1207 million worth of stock at the end of June. It was followed by Egerton Capital Limited with a $942 million position. Other investors bullish on the company included Impax Asset Management, Millennium Management, and Holocene Advisors. In terms of the portfolio weights assigned to each position Ako Capital allocated the biggest weight to Linde plc (NYSE:LIN), around 13.6% of its 13F portfolio. Albar Capital is also relatively very bullish on the stock, dishing out 11.58 percent of its 13F equity portfolio to LIN.

With a general bullishness amongst the heavyweights, some big names have been driving this bullishness. Renaissance Technologies, initiated the most outsized position in Linde plc (NYSE:LIN). Renaissance Technologies had $145.7 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also initiated a $43.9 million position during the quarter. The other funds with brand new LIN positions are Ray Dalio’s Bridgewater Associates, Javier Velazquez’s Albar Capital, and Steve Cohen’s Point72 Asset Management.

Let’s also examine hedge fund activity in other stocks similar to Linde plc (NYSE:LIN). We will take a look at Bristol Myers Squibb Company (NYSE:BMY), Charter Communications, Inc. (NASDAQ:CHTR), Citigroup Inc. (NYSE:C), Union Pacific Corporation (NYSE:UNP), Royal Bank of Canada (NYSE:RY), Sea Limited (NYSE:SE), and NextEra Energy, Inc. (NYSE:NEE). This group of stocks’ market caps are closest to LIN’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 69.3 hedge funds with bullish positions and the average amount invested in these stocks was $7383 million. That figure was $5920 million in LIN’s case. Sea Limited (NYSE:SE) is the most popular stock in this table. On the other hand Royal Bank of Canada (NYSE:RY) is the least popular one with only 18 bullish hedge fund positions. Linde plc (NYSE:LIN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for LIN is 59. 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 26.3% in 2021 through October 29th and still beat the market by 2.3 percentage points. A small number of hedge funds were also right about betting on LIN as the stock returned 10.8% since the end of the second quarter (through 10/29) and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.