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The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of September 30th. In this article we look at what those investors think of Morningstar, Inc. (NASDAQ:MORN).
Is Morningstar, Inc. (NASDAQ:MORN) the right investment to pursue these days? The smart money was turning bullish. The number of bullish hedge fund positions inched up by 2 lately. Morningstar, Inc. (NASDAQ:MORN) was in 26 hedge funds' portfolios at the end of the third quarter of 2021. The all time high for this statistic was previously 25. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that MORN isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. Now we're going to take a glance at the latest hedge fund action encompassing Morningstar, Inc. (NASDAQ:MORN).
Chuck Royce of Royce & Associates
Do Hedge Funds Think MORN Is A Good Stock To Buy Now?
At third quarter's end, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 8% from the previous quarter. By comparison, 21 hedge funds held shares or bullish call options in MORN a year ago. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Morningstar, Inc. (NASDAQ:MORN) was held by Select Equity Group, which reported holding $1078.1 million worth of stock at the end of September. It was followed by Echo Street Capital Management with a $142.7 million position. Other investors bullish on the company included Renaissance Technologies, Royce & Associates, and Praesidium Investment Management Company. In terms of the portfolio weights assigned to each position Becker Drapkin Management allocated the biggest weight to Morningstar, Inc. (NASDAQ:MORN), around 4.68% of its 13F portfolio. Select Equity Group is also relatively very bullish on the stock, dishing out 3.62 percent of its 13F equity portfolio to MORN.
Consequently, key hedge funds have jumped into Morningstar, Inc. (NASDAQ:MORN) headfirst. LMR Partners, managed by Ben Levine, Andrew Manuel and Stefan Renold, established the most valuable position in Morningstar, Inc. (NASDAQ:MORN). LMR Partners had $17.7 million invested in the company at the end of the quarter. Peter Algert's Algert Global also made a $0.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Mika Toikka's AlphaCrest Capital Management, Peter Muller's PDT Partners, and Paul Tudor Jones's Tudor Investment Corp.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Morningstar, Inc. (NASDAQ:MORN) but similarly valued. These stocks are Centrais Elétricas Brasileiras S.A. - Eletrobrás (NYSE:EBR), Invesco Ltd. (NYSE:IVZ), Kirkland Lake Gold Ltd. (NYSE:KL), Wix.Com Ltd (NASDAQ:WIX), ironSource Ltd. (NYSE:IS), East West Bancorp, Inc. (NASDAQ:EWBC), and Cable One Inc (NYSE:CABO). This group of stocks' market values are similar to MORN's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position EBR,6,3756,1 IVZ,38,1355213,-2 KL,21,480649,-1 WIX,25,740850,-10 IS,29,726683,-3 EWBC,29,526433,5 CABO,26,585271,6 Average,24.9,631265,-0.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.9 hedge funds with bullish positions and the average amount invested in these stocks was $631 million. That figure was $1645 million in MORN's case. Invesco Ltd. (NYSE:IVZ) is the most popular stock in this table. On the other hand Centrais Elétricas Brasileiras S.A. - Eletrobrás (NYSE:EBR) is the least popular one with only 6 bullish hedge fund positions. Morningstar, Inc. (NASDAQ:MORN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MORN is 68.3. 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 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. Hedge funds were also right about betting on MORN as the stock returned 23.3% since the end of Q3 (through 12/9) 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.