Out of thousands of stocks that are currently traded on the market, it is difficult to determine those that can really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of over 700 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Corning Incorporated (NYSE:GLW).
Corning Incorporated (NYSE:GLW) was in 27 hedge funds' portfolios at the end of September. GLW has experienced an increase in hedge fund interest in recent months. There were 21 hedge funds in our database with GLW positions at the end of the previous quarter. Our calculations also showed that GLW isn't among the 30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (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 24% through December 3, 2018. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let's analyze the key hedge fund action regarding Corning Incorporated (NYSE:GLW).
What does the smart money think about Corning Incorporated (NYSE:GLW)?
Heading into the fourth quarter of 2018, a total of 27 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 29% from one quarter earlier. By comparison, 32 hedge funds held shares or bullish call options in GLW heading into this year. With hedgies' capital changing hands, there exists a few key hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Levin Capital Strategies, managed by John A. Levin, holds the largest position in Corning Incorporated (NYSE:GLW). Levin Capital Strategies has a $68.5 million position in the stock, comprising 1.2% of its 13F portfolio. On Levin Capital Strategies's heels is Holocene Advisors, managed by Brandon Haley, which holds a $52.4 million position; 0.8% of its 13F portfolio is allocated to the company. Some other peers that hold long positions contain Phill Gross and Robert Atchinson's Adage Capital Management, Brian Ashford-Russell and Tim Woolley's Polar Capital and Donald Yacktman's Yacktman Asset Management.
As aggregate interest increased, key hedge funds have jumped into Corning Incorporated (NYSE:GLW) headfirst. Masters Capital Management, managed by Mike Masters, created the biggest position in Corning Incorporated (NYSE:GLW). Masters Capital Management had $28.2 million invested in the company at the end of the quarter. Dmitry Balyasny's Balyasny Asset Management also made a $20.7 million investment in the stock during the quarter. The other funds with brand new GLW positions are Mike Masters's Masters Capital Management, Jeffrey Talpins's Element Capital Management, and Lee Ainslie's Maverick Capital.
Let's now take a look at hedge fund activity in other stocks similar to Corning Incorporated (NYSE:GLW). These stocks are Amphenol Corporation (NYSE:APH), Archer Daniels Midland Company (NYSE:ADM), Sirius XM Holdings Inc (NASDAQ:SIRI), and O'Reilly Automotive Inc (NASDAQ:ORLY). This group of stocks' market caps are similar to GLW's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position APH,25,471274,4 ADM,32,771684,11 SIRI,24,1277620,-2 ORLY,43,2035471,3 Average,31,1139,4 [/table]
View table here if you experience formatting issues. As you can see these stocks had an average of 31 hedge funds with bullish positions and the average amount invested in these stocks was $1.14 billion. That figure was $373 million in GLW's case. O'Reilly Automotive Inc (NASDAQ:ORLY) is the most popular stock in this table. On the other hand Sirius XM Holdings Inc (NASDAQ:SIRI) is the least popular one with only 24 bullish hedge fund positions. Corning Incorporated (NYSE:GLW) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. In this regard ORLY might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.