Concerns over a shift in Fed’s easy monetary policy have hit several hedge funds hard during the third quarter. A number of sectors are in correction territory. More importantly, Russell 2000 ETF (IWM) underperformed the larger S&P 500 ETF (SPY) by more than 14 percentage points between June 25, 2015 and October 30, 2015. Hedge funds and institutional investors tracked by Insider Monkey usually invest a disproportionate amount of their portfolios in smaller cap stocks. We have been receiving indications that hedge funds were paring back their overall exposure and this is one of the factors behind the recent movements in major indices. In this article, we will take a closer look at hedge fund sentiment towards Federal-Mogul Corporation (NASDAQ:FDML).
Federal-Mogul Corporation (NASDAQ:FDML) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 14 hedge funds’ portfolios at the end of the third quarter of 2015. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Seres Therapeutics Inc (NASDAQ:MCRB), NuStar GP Holdings, LLC (NYSE:NSH), and SPS Commerce, Inc. (NASDAQ:SPSC) to gather more data points.
Follow Federal-Mogul Holdings Corp (NASDAQ:FDML)
Follow Federal-Mogul Holdings Corp (NASDAQ:FDML)
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Now, let’s take a look at the fresh action surrounding Federal-Mogul Corporation (NASDAQ:FDML).
How are hedge funds trading Federal-Mogul Corporation (NASDAQ:FDML)?
According to Insider Monkey’s hedge fund database, Carl Icahn’s Icahn Capital LP has the largest position in Federal-Mogul Corporation (NASDAQ:FDML), worth close to $946.6 million, accounting for 3.4% of its total 13F portfolio. On Icahn Capital LP’s heels is GAMCO Investors, managed by Mario Gabelli, which holds an $53.4 million position; 0.4% of its 13F portfolio is allocated to the company. Some other members of the smart money with similar optimism include Murray Stahl’s Horizon Asset Management, Ken Griffin’s Citadel Investment Group and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
It’s worth mentioning that Roger Ibbotson’s Zebra Capital Management cut the biggest stake of all the hedgies watched by Insider Monkey, comprising close to $0.3 million in stock, and Cliff Asness’s AQR Capital Management was right behind this move, as the fund dropped about $0.2 million worth. These moves are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Federal-Mogul Corporation (NASDAQ:FDML) but similarly valued. We will take a look at Seres Therapeutics Inc (NASDAQ:MCRB), NuStar GP Holdings, LLC (NYSE:NSH), SPS Commerce, Inc. (NASDAQ:SPSC), and Texas Pacific Land Trust (NYSE:TPL). All of these stocks’ market caps resemble FDML’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MCRB | 10 | 43115 | -3 |
| NSH | 9 | 45758 | 0 |
| SPSC | 7 | 43516 | -4 |
| TPL | 5 | 242368 | -2 |
As you can see these stocks had an average of 7.75 hedge funds with bullish positions and the average amount invested in these stocks was $94 million. That figure was $1,010 million in FDML’s case. Seres Therapeutics Inc (NASDAQ:MCRB) is the most popular stock in this table. On the other hand Texas Pacific Land Trust (NYSE:TPL) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Federal-Mogul Corporation (NASDAQ:FDML) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
