Before putting in our own effort and resources into finding a good investment, we can quickly utilize hedge fund expertise to give us a quick glimpse of whether that stock could make for a good addition to our portfolios. The odds are not exactly stacked in investors’ favor when it comes to beating the market, as evidenced by the fact that less than 49% of the stocks in the S&P 500 did so during the 12-month period ending October 30. The stats were even worse in recent years when most of the advances in the market were due to large gains by FAANG stocks. However, one bright side for individual investors was the strong performance of hedge funds’ top consensus picks. This year hedge funds’ top 30 stock picks outperformed the S&P 500 Index by 4 percentage points through the middle of November. Thus, we can see that the tireless research and efforts of hedge funds to identify winning stocks can work to our advantage when we know how to use the data. While not all of their picks will be winners, our odds are much better following their best stock picks than trying to go it alone.
WillScot Corporation (NASDAQ:WSC) shareholders have witnessed a decrease in hedge fund sentiment in recent months. Our calculations also showed that wsc isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We’re going to review the fresh hedge fund action encompassing WillScot Corporation (NASDAQ:WSC).
Hedge fund activity in WillScot Corporation (NASDAQ:WSC)
At the end of the third quarter, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -16% from one quarter earlier. By comparison, 17 hedge funds held shares or bullish call options in WSC heading into this year. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, David Rosen’s Rubric Capital Management has the number one position in WillScot Corporation (NASDAQ:WSC), worth close to $47.2 million, comprising 5% of its total 13F portfolio. On Rubric Capital Management’s heels is Christopher Pucillo of Solus Alternative Asset Management, with a $33.3 million position; the fund has 6.1% of its 13F portfolio invested in the stock. Other members of the smart money with similar optimism consist of Jeffrey Bersh and Michael Wartell’s Venor Capital Management, James Dinan’s York Capital Management and Anand Parekh’s Alyeska Investment Group.
Since WillScot Corporation (NASDAQ:WSC) has faced declining sentiment from the entirety of the hedge funds we track, logic holds that there were a few money managers who were dropping their entire stakes by the end of the third quarter. Interestingly, Isaac Corre’s Governors Lane dumped the largest investment of the 700 funds tracked by Insider Monkey, totaling close to $25.2 million in stock, and Steve Pigott’s Fort Baker Capital Management was right behind this move, as the fund cut about $14.8 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 5 funds by the end of the third quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as WillScot Corporation (NASDAQ:WSC) but similarly valued. These stocks are Mueller Water Products, Inc. (NYSE:MWA), NOW Inc (NYSE:DNOW), B&G Foods, Inc. (NYSE:BGS), and Flagstar Bancorp Inc (NYSE:FBC). This group of stocks’ market values are closest to WSC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MWA | 16 | 236172 | 0 |
| DNOW | 11 | 79327 | 2 |
| BGS | 13 | 82364 | -2 |
| FBC | 15 | 167894 | -6 |
| Average | 13.75 | 141439 | -1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $141 million. That figure was $262 million in WSC’s case. Mueller Water Products, Inc. (NYSE:MWA) is the most popular stock in this table. On the other hand NOW Inc (NYSE:DNOW) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks WillScot Corporation (NASDAQ:WSC) 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.
Disclosure: None. This article was originally published at Insider Monkey.
