Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Whirlpool Corporation (NYSE:WHR) based on that data.
Is Whirlpool Corporation (NYSE:WHR) the right pick for your portfolio? Investors who are in the know are becoming less confident. The number of bullish hedge fund positions went down by 3 recently. Our calculations also showed that WHR isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Bruce Kovner of Caxton Associates LP
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s take a gander at the fresh hedge fund action encompassing Whirlpool Corporation (NYSE:WHR).
How have hedgies been trading Whirlpool Corporation (NYSE:WHR)?
At the end of the first quarter, a total of 25 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -11% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in WHR over the last 18 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Greenhaven Associates held the most valuable stake in Whirlpool Corporation (NYSE:WHR), which was worth $236.9 million at the end of the third quarter. On the second spot was Lyrical Asset Management which amassed $138.8 million worth of shares. AQR Capital Management, Arrowstreet Capital, and Marshall Wace LLP were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Greenhaven Associates allocated the biggest weight to Whirlpool Corporation (NYSE:WHR), around 8.81% of its 13F portfolio. Lyrical Asset Management is also relatively very bullish on the stock, setting aside 3.41 percent of its 13F equity portfolio to WHR.
Seeing as Whirlpool Corporation (NYSE:WHR) has experienced declining sentiment from the aggregate hedge fund industry, we can see that there is a sect of funds that decided to sell off their positions entirely last quarter. Intriguingly, Renaissance Technologies dumped the largest investment of the 750 funds monitored by Insider Monkey, valued at an estimated $13.2 million in stock, and David Harding’s Winton Capital Management was right behind this move, as the fund said goodbye to about $5.1 million worth. These transactions are interesting, as total hedge fund interest dropped by 3 funds last quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Whirlpool Corporation (NYSE:WHR) but similarly valued. These stocks are Voya Financial Inc (NYSE:VOYA), Ascendis Pharma A/S (NASDAQ:ASND), Douglas Emmett, Inc. (NYSE:DEI), and China Southern Airlines Co Ltd (NYSE:ZNH). This group of stocks’ market valuations are closest to WHR’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VOYA | 32 | 617032 | -11 |
| ASND | 33 | 2201133 | -5 |
| DEI | 22 | 526330 | 3 |
| ZNH | 2 | 7964 | -1 |
| Average | 22.25 | 838115 | -3.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.25 hedge funds with bullish positions and the average amount invested in these stocks was $838 million. That figure was $567 million in WHR’s case. Ascendis Pharma A/S (NASDAQ:ASND) is the most popular stock in this table. On the other hand China Southern Airlines Co Ltd (NYSE:ZNH) is the least popular one with only 2 bullish hedge fund positions. Whirlpool Corporation (NYSE:WHR) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th but still beat the market by 14.2 percentage points. Hedge funds were also right about betting on WHR as the stock returned 58.7% in Q2 (through June 10th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
