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Do Hedge Funds Love Linde plc (LIN)?

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·5 min read
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  • LIN
  • ^GSPC

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 June. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Linde plc (NYSE:LIN), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Is Linde plc (NYSE:LIN) a great investment today? Hedge funds were getting more optimistic. The number of long hedge fund positions improved by 12 recently. Linde plc (NYSE:LIN) was in 55 hedge funds' portfolios at the end of the second quarter of 2021. The all time high for this statistic is 60. Our calculations also showed that LIN isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).

At the moment there are a large number of tools stock traders use to evaluate stocks. Some of the best tools are hedge fund and insider trading interest. We have shown that, historically, those who follow the best picks of the best money managers can outperform the S&P 500 by a significant amount (see the details here). Also, our monthly newsletter's portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website .

Michael Gelband of ExodusPoint Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we're going to analyze the fresh hedge fund action regarding Linde plc (NYSE:LIN).

Do Hedge Funds Think LIN Is A Good Stock To Buy Now?

At Q2's end, a total of 55 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 28% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in LIN over the last 24 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.

More specifically, Ako Capital was the largest shareholder of Linde plc (NYSE:LIN), with a stake worth $1207 million reported as of the end of June. Trailing Ako Capital was Egerton Capital Limited, which amassed a stake valued at $942 million. Impax Asset Management, Millennium Management, and Holocene Advisors 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 Ako Capital allocated the biggest weight to Linde plc (NYSE:LIN), around 13.6% of its 13F portfolio. Albar Capital is also relatively very bullish on the stock, dishing out 11.58 percent of its 13F equity portfolio to LIN.

Now, key hedge funds were leading the bulls' herd. Renaissance Technologies, initiated the most valuable position in Linde plc (NYSE:LIN). Renaissance Technologies had $145.7 million invested in the company at the end of the quarter. Michael Gelband's ExodusPoint Capital also initiated a $43.9 million position during the quarter. The other funds with new positions in the stock are Ray Dalio's Bridgewater Associates, Javier Velazquez's Albar Capital, and Steve Cohen's Point72 Asset Management.

Let's also examine hedge fund activity in other stocks similar to Linde plc (NYSE:LIN). We will take a look at Bristol Myers Squibb Company (NYSE:BMY), Charter Communications, Inc. (NASDAQ:CHTR), Citigroup Inc. (NYSE:C), Union Pacific Corporation (NYSE:UNP), Royal Bank of Canada (NYSE:RY), Sea Limited (NYSE:SE), and NextEra Energy, Inc. (NYSE:NEE). This group of stocks' market caps are closest to LIN's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BMY,73,5202516,-8 CHTR,75,19486659,1 C,87,6155245,-3 UNP,69,5034926,-6 RY,18,905415,0 SE,104,12209916,6 NEE,59,2686533,-4 Average,69.3,7383030,-2 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 69.3 hedge funds with bullish positions and the average amount invested in these stocks was $7383 million. That figure was $5920 million in LIN's case. Sea Limited (NYSE:SE) is the most popular stock in this table. On the other hand Royal Bank of Canada (NYSE:RY) is the least popular one with only 18 bullish hedge fund positions. Linde plc (NYSE:LIN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for LIN is 59. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 22.9% in 2021 through October 1st and still beat the market by 5.6 percentage points. A small number of hedge funds were also right about betting on LIN as the stock returned 3.4% since the end of the second quarter (through 10/1) and outperformed the market by an even larger margin.

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