At Insider Monkey, we pore over the filings of nearly 866 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of March 31st. In this article, we will use that wealth of knowledge to determine whether or not Freeport-McMoRan Inc. (NYSE:FCX) makes for a good investment right now.
Is Freeport-McMoRan Inc. (NYSE:FCX) going to take off soon? The best stock pickers were becoming more confident. The number of long hedge fund bets moved up by 7 in recent months. Freeport-McMoRan Inc. (NYSE:FCX) was in 68 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic was previously 61. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that FCX isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 61 hedge funds in our database with FCX holdings at the end of December.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Kerr Neilson of Platinum Asset Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium 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. Now we’re going to go over the fresh hedge fund action encompassing Freeport-McMoRan Inc. (NYSE:FCX).
Do Hedge Funds Think FCX Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 68 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 11% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards FCX over the last 23 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Fisher Asset Management, managed by Ken Fisher, holds the most valuable position in Freeport-McMoRan Inc. (NYSE:FCX). Fisher Asset Management has a $1.4588 billion position in the stock, comprising 1% of its 13F portfolio. The second most bullish fund manager is Lansdowne Partners, led by Suzi Nutton (CEO), holding a $223.3 million position; the fund has 7.3% of its 13F portfolio invested in the stock. Some other peers that are bullish encompass Stanley Druckenmiller’s Duquesne Capital, and Kerr Neilson’s Platinum Asset Management. In terms of the portfolio weights assigned to each position Prince Street Capital Management allocated the biggest weight to Freeport-McMoRan Inc. (NYSE:FCX), around 18.26% of its 13F portfolio. Lansdowne Partners is also relatively very bullish on the stock, dishing out 7.27 percent of its 13F equity portfolio to FCX.
As industrywide interest jumped, some big names have jumped into Freeport-McMoRan Inc. (NYSE:FCX) headfirst. Holocene Advisors, managed by Brandon Haley, initiated the most outsized position in Freeport-McMoRan Inc. (NYSE:FCX). Holocene Advisors had $47.6 million invested in the company at the end of the quarter. Steven Tananbaum’s GoldenTree Asset Management also made a $38.1 million investment in the stock during the quarter. The following funds were also among the new FCX investors: Josh Donfeld and David Rogers’s Castle Hook Partners, Gilchrist Berg’s Water Street Capital, and Zach Schreiber’s Point State Capital.
Let’s now take a look at hedge fund activity in other stocks similar to Freeport-McMoRan Inc. (NYSE:FCX). These stocks are Ford Motor Company (NYSE:F), ING Groep N.V. (NYSE:ING), Dow Inc. (NYSE:DOW), Walgreens Boots Alliance Inc (NASDAQ:WBA), Kimberly Clark Corporation (NYSE:KMB), Pinterest, Inc. (NYSE:PINS), and Las Vegas Sands Corp. (NYSE:LVS). All of these stocks’ market caps resemble FCX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| F | 49 | 2197658 | 8 |
| ING | 10 | 532082 | 1 |
| DOW | 41 | 717981 | -6 |
| WBA | 41 | 1132820 | 5 |
| KMB | 31 | 1287433 | -6 |
| PINS | 83 | 4189031 | -12 |
| LVS | 62 | 2441021 | -1 |
| Average | 45.3 | 1785432 | -1.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 45.3 hedge funds with bullish positions and the average amount invested in these stocks was $1785 million. That figure was $3291 million in FCX’s case. Pinterest, Inc. (NYSE:PINS) is the most popular stock in this table. On the other hand ING Groep N.V. (NYSE:ING) is the least popular one with only 10 bullish hedge fund positions. Freeport-McMoRan Inc. (NYSE:FCX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FCX is 79.7. 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 25.8% in 2021 through August 6th and still beat the market by 6.7 percentage points. Hedge funds were also right about betting on FCX, though not to the same extent, as the stock returned 12.4% since Q1 (through August 6th) and outperformed the market as well.
Follow Freeport-Mcmoran Inc (NYSE:FCX)
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Disclosure: None. This article was originally published at Insider Monkey.
