Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow over 700 of the best-performing investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Waste Management, Inc. (NYSE:WM), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Hedge fund interest in Waste Management, Inc. (NYSE:WM) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare WM to other stocks including Activision Blizzard, Inc. (NASDAQ:ATVI), Fiat Chrysler Automobiles NV (NYSE:FCAU), and Chipotle Mexican Grill, Inc. (NYSE:CMG) to get a better sense of its popularity.
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If you’d ask most shareholders, hedge funds are seen as slow, old investment tools of years past. While there are more than an 8000 funds with their doors open at present, Our researchers choose to focus on the upper echelon of this club, about 700 funds. These investment experts preside over the lion’s share of the hedge fund industry’s total asset base, and by tailing their matchless equity investments, Insider Monkey has unearthed several investment strategies that have historically outperformed the broader indices. Insider Monkey’s small-cap hedge fund strategy outstripped the S&P 500 index by 12 percentage points per annum for a decade in their back tests.
Now, we’re going to take a look at the fresh action regarding Waste Management, Inc. (NYSE:WM).
Hedge fund activity in Waste Management, Inc. (NYSE:WM)
At the end of the third quarter, a total of 31 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Michael Larson’s Bill & Melinda Gates Foundation Trust has the most valuable position in Waste Management, Inc. (NYSE:WM), worth close to $928.1 million, accounting for 5.4% of its total 13F portfolio. Sitting at the No. 2 spot is Cliff Asness of AQR Capital Management, with a $128.6 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that are bullish encompass Mario Gabelli’s GAMCO Investors, David Harding’s Winton Capital Management and John Overdeck and David Siegel’s Two Sigma Advisors.
At the top of the heap, Daniel S. Och’s OZ Management dropped the biggest stake of the “upper crust” of funds monitored by Insider Monkey, worth close to $94.1 million in stock. Matthew Tewksbury’s fund, Stevens Capital Management, also sold off its stock, about $14.2 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Waste Management, Inc. (NYSE:WM) but similarly valued. We will take a look at Activision Blizzard, Inc. (NASDAQ:ATVI), Fiat Chrysler Automobiles NV (NYSE:FCAU), Chipotle Mexican Grill, Inc. (NYSE:CMG), and TransCanada Corporation (USA) (NYSE:TRP). This group of stocks’ market valuations are similar to WM’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ATVI | 43 | 2087134 | -3 |
| FCAU | 34 | 1179659 | -1 |
| CMG | 28 | 1099623 | -8 |
| TRP | 14 | 398464 | -2 |
As you can see these stocks had an average of 29.75 hedge funds with bullish positions and the average amount invested in these stocks was $1191 million. That figure was $1359 million in WM’s case. Activision Blizzard, Inc. (NASDAQ:ATVI) is the most popular stock in this table. On the other hand TransCanada Corporation (USA) (NYSE:TRP) is the least popular one with only 14 bullish hedge fund positions. Waste Management, Inc. (NYSE:WM) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ATVI might be a better candidate to consider a long position.
