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 Vulcan Materials Company (NYSE:VMC) and determine whether the smart money was really smart about this stock.
Hedge fund interest in Vulcan Materials Company (NYSE:VMC) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that VMC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). At the end of this article we will also compare VMC to other stocks including Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY), Dover Corporation (NYSE:DOV), and Zillow Group Inc (NASDAQ:Z) to get a better sense of its popularity.
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. Keeping this in mind we’re going to view the recent hedge fund action encompassing Vulcan Materials Company (NYSE:VMC).
John Armitage of Egerton Capital
Do Hedge Funds Think VMC Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 43 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in VMC over the last 25 quarters. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
The largest stake in Vulcan Materials Company (NYSE:VMC) was held by Citadel Investment Group, which reported holding $302.9 million worth of stock at the end of September. It was followed by Holocene Advisors with a $248.6 million position. Other investors bullish on the company included Stockbridge Partners, Alkeon Capital Management, and Egerton Capital Limited. In terms of the portfolio weights assigned to each position Park Presidio Capital allocated the biggest weight to Vulcan Materials Company (NYSE:VMC), around 6.16% of its 13F portfolio. Stockbridge Partners is also relatively very bullish on the stock, setting aside 4.8 percent of its 13F equity portfolio to VMC.
Seeing as Vulcan Materials Company (NYSE:VMC) has experienced a decline in interest from the smart money, we can see that there lies a certain “tier” of fund managers that slashed their positions entirely last quarter. Intriguingly, Paul Tudor Jones’s Tudor Investment Corp dropped the biggest investment of all the hedgies monitored by Insider Monkey, comprising an estimated $4.7 million in call options, and Israel Englander’s Millennium Management was right behind this move, as the fund dumped about $3.5 million worth. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Vulcan Materials Company (NYSE:VMC) but similarly valued. We will take a look at Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY), Dover Corporation (NYSE:DOV), Zillow Group Inc (NASDAQ:Z), Monolithic Power Systems, Inc. (NASDAQ:MPWR), Xylem Inc (NYSE:XYL), Hormel Foods Corporation (NYSE:HRL), and Imperial Oil Limited (NYSE:IMO). This group of stocks’ market values resemble VMC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ALNY | 40 | 1030395 | 7 |
| DOV | 32 | 351286 | 3 |
| Z | 67 | 4251493 | -9 |
| MPWR | 28 | 799034 | -6 |
| XYL | 22 | 821321 | -1 |
| HRL | 29 | 476824 | 5 |
| IMO | 10 | 99009 | -5 |
| Average | 32.6 | 1118480 | -0.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.6 hedge funds with bullish positions and the average amount invested in these stocks was $1118 million. That figure was $1923 million in VMC’s case. Zillow Group Inc (NASDAQ:Z) is the most popular stock in this table. On the other hand Imperial Oil Limited (NYSE:IMO) is the least popular one with only 10 bullish hedge fund positions. Vulcan Materials Company (NYSE:VMC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VMC is 56.6. 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 VMC as the stock returned 12.7% since the end of Q3 (through 1/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Vulcan Materials Co (NYSE:VMC)
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Disclosure: None. This article was originally published at Insider Monkey.
