- Oops!Something went wrong.Please try again later.
- Oops!Something went wrong.Please try again later.
With the second-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the third quarter of 2021. One of these stocks was Lumen Technologies, Inc. (NYSE:LUMN).
Lumen Technologies, Inc. (NYSE:LUMN) has seen an increase in hedge fund sentiment of late. Lumen Technologies, Inc. (NYSE:LUMN) was in 33 hedge funds' portfolios at the end of the second quarter of 2021. The all time high for this statistic is 40. Our calculations also showed that LUMN isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).
According to most shareholders, hedge funds are assumed to be worthless, outdated financial tools of yesteryear. While there are more than 8000 funds trading today, Our experts hone in on the leaders of this club, approximately 850 funds. These hedge fund managers control the lion's share of the hedge fund industry's total capital, and by tracking their best equity investments, Insider Monkey has unsheathed many investment strategies that have historically defeated the broader indices. Insider Monkey's flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. 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.
Prem Watsa of Fairfax Financial Holdings
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 review the recent hedge fund action encompassing Lumen Technologies, Inc. (NYSE:LUMN).
Do Hedge Funds Think LUMN Is A Good Stock To Buy Now?
At the end of June, a total of 33 of the hedge funds tracked by Insider Monkey were long this stock, a change of 3% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in LUMN over the last 24 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey's hedge fund database, Southeastern Asset Management, managed by Mason Hawkins, holds the most valuable position in Lumen Technologies, Inc. (NYSE:LUMN). Southeastern Asset Management has a $837.9 million position in the stock, comprising 16.8% of its 13F portfolio. On Southeastern Asset Management's heels is Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which holds a $59.9 million position; 0.1% of its 13F portfolio is allocated to the stock. Other peers that hold long positions include D. E. Shaw's D E Shaw, Noam Gottesman's GLG Partners and Prem Watsa's Fairfax Financial Holdings. In terms of the portfolio weights assigned to each position Southeastern Asset Management allocated the biggest weight to Lumen Technologies, Inc. (NYSE:LUMN), around 16.85% of its 13F portfolio. Cove Street Capital is also relatively very bullish on the stock, dishing out 2.01 percent of its 13F equity portfolio to LUMN.
As one would reasonably expect, key hedge funds have been driving this bullishness. Adage Capital Management, managed by Phill Gross and Robert Atchinson, established the biggest position in Lumen Technologies, Inc. (NYSE:LUMN). Adage Capital Management had $1.4 million invested in the company at the end of the quarter. Mike Vranos's Ellington also made a $0.9 million investment in the stock during the quarter. The other funds with brand new LUMN positions are David Harding's Winton Capital Management, Matthew Hulsizer's PEAK6 Capital Management, and Qing Li's Sciencast Management.
Let's also examine hedge fund activity in other stocks similar to Lumen Technologies, Inc. (NYSE:LUMN). We will take a look at Brown & Brown, Inc. (NYSE:BRO), Masco Corporation (NYSE:MAS), LKQ Corporation (NASDAQ:LKQ), Cognex Corporation (NASDAQ:CGNX), Howmet Aerospace Inc. (NYSE:HWM), Molina Healthcare, Inc. (NYSE:MOH), and Agnico Eagle Mines Limited (NYSE:AEM). All of these stocks' market caps are similar to LUMN's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BRO,26,1212549,1 MAS,35,480276,2 LKQ,35,1708946,-1 CGNX,35,536677,1 HWM,47,3892856,-4 MOH,34,1618744,3 AEM,29,235678,1 Average,34.4,1383675,0.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 34.4 hedge funds with bullish positions and the average amount invested in these stocks was $1384 million. That figure was $1056 million in LUMN's case. Howmet Aerospace Inc. (NYSE:HWM) is the most popular stock in this table. On the other hand Brown & Brown, Inc. (NYSE:BRO) is the least popular one with only 26 bullish hedge fund positions. Lumen Technologies, Inc. (NYSE:LUMN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for LUMN is 47.4. 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. 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 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 24.9% in 2021 through October 15th and surpassed the market again by 4.5 percentage points. Unfortunately LUMN wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); LUMN investors were disappointed as the stock returned -9.2% since the end of June (through 10/15) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
Get real-time email alerts: Follow Lumen Technologies Inc. (NYSE:LUMN)
Disclosure: None. This article was originally published at Insider Monkey.