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Is Fluor Corporation (FLR) Going To Burn These Hedge Funds?

Asma UL Husna

Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 750 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds' 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Fluor Corporation (NYSE:FLR) in this article.

Is Fluor Corporation (NYSE:FLR) an exceptional stock to buy now? Hedge funds are becoming less hopeful. The number of long hedge fund bets went down by 1 recently. Our calculations also showed that FLR isn't among the 30 most popular stocks among hedge funds (view the video below). FLR was in 21 hedge funds' portfolios at the end of June. There were 22 hedge funds in our database with FLR holdings at the end of the previous quarter. Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

5 Most Popular Stocks Among Hedge Funds

According to most stock holders, hedge funds are assumed to be slow, old investment vehicles of years past. While there are more than 8000 funds with their doors open at present, Our experts look at the bigwigs of this group, around 750 funds. Most estimates calculate that this group of people oversee bulk of the hedge fund industry's total asset base, and by shadowing their highest performing picks, Insider Monkey has deciphered numerous investment strategies that have historically exceeded the S&P 500 index. Insider Monkey's flagship hedge fund strategy surpassed the S&P 500 index by around 5 percentage points per year since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .

FLR_oct2019

We're going to take a glance at the recent hedge fund action regarding Fluor Corporation (NYSE:FLR).

How are hedge funds trading Fluor Corporation (NYSE:FLR)?

Heading into the third quarter of 2019, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -5% from the previous quarter. On the other hand, there were a total of 22 hedge funds with a bullish position in FLR a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Jonathan Barrett Luminus Management

The largest stake in Fluor Corporation (NYSE:FLR) was held by Two Sigma Advisors, which reported holding $74.6 million worth of stock at the end of March. It was followed by Renaissance Technologies with a $64.7 million position. Other investors bullish on the company included Ariel Investments, AQR Capital Management, and Luminus Management.

Seeing as Fluor Corporation (NYSE:FLR) has experienced falling interest from hedge fund managers, it's safe to say that there exists a select few money managers who were dropping their entire stakes in the second quarter. Interestingly, Robert Bishop's Impala Asset Management cut the largest stake of the "upper crust" of funds monitored by Insider Monkey, comprising about $20.2 million in call options. Alexander Mitchell's fund, Scopus Asset Management, also dumped its call options, about $7.4 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds in the second quarter.

Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Fluor Corporation (NYSE:FLR) but similarly valued. We will take a look at NewMarket Corporation (NYSE:NEU), Highwoods Properties Inc (NYSE:HIW), Foot Locker, Inc. (NYSE:FL), and Six Flags Entertainment Corp (NYSE:SIX). All of these stocks' market caps are closest to FLR's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NEU,20,88622,-1 HIW,13,165968,-1 FL,32,592888,-3 SIX,30,741613,0 Average,23.75,397273,-1.25 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 23.75 hedge funds with bullish positions and the average amount invested in these stocks was $397 million. That figure was $287 million in FLR's case. Foot Locker, Inc. (NYSE:FL) is the most popular stock in this table. On the other hand Highwoods Properties Inc (NYSE:HIW) is the least popular one with only 13 bullish hedge fund positions. Fluor Corporation (NYSE:FLR) 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately FLR wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); FLR investors were disappointed as the stock returned -42.5% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far in 2019.

Disclosure: None. This article was originally published at Insider Monkey.

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