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At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Hubbell Incorporated (NYSE:HUBB).
Is HUBB a good stock to buy? Hubbell Incorporated (NYSE:HUBB) was in 30 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistic is 37. HUBB investors should pay attention to an increase in hedge fund sentiment in recent months. There were 29 hedge funds in our database with HUBB holdings at the end of June. Our calculations also showed that HUBB isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
To most shareholders, hedge funds are seen as worthless, old financial tools of the past. While there are greater than 8000 funds in operation at the moment, Our experts hone in on the moguls of this group, approximately 850 funds. These money managers orchestrate the lion's share of the smart money's total capital, and by monitoring their best investments, Insider Monkey has discovered various investment strategies that have historically outpaced the market. Insider Monkey's flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
Peter Rathjens of Arrowstreet Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy to pick the best large-cap stocks to buy. 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 website. Now we're going to check out the new hedge fund action regarding Hubbell Incorporated (NYSE:HUBB).
Do Hedge Funds Think HUBB Is A Good Stock To Buy Now?
At the end of September, a total of 30 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 3% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards HUBB over the last 21 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.
Among these funds, Impax Asset Management held the most valuable stake in Hubbell Incorporated (NYSE:HUBB), which was worth $119.6 million at the end of the third quarter. On the second spot was Royce & Associates which amassed $51.4 million worth of shares. Renaissance Technologies, AQR Capital Management, and Arrowstreet Capital 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 Bronson Point Partners allocated the biggest weight to Hubbell Incorporated (NYSE:HUBB), around 1.92% of its 13F portfolio. Impax Asset Management is also relatively very bullish on the stock, earmarking 1.05 percent of its 13F equity portfolio to HUBB.
Consequently, key money managers were breaking ground themselves. Citadel Investment Group, managed by Ken Griffin, created the biggest position in Hubbell Incorporated (NYSE:HUBB). Citadel Investment Group had $3.1 million invested in the company at the end of the quarter. John Overdeck and David Siegel's Two Sigma Advisors also initiated a $2.9 million position during the quarter. The other funds with new positions in the stock are Benjamin A. Smith's Laurion Capital Management, Parvinder Thiara's Athanor Capital, and Jinghua Yan's TwinBeech Capital.
Let's now take a look at hedge fund activity in other stocks similar to Hubbell Incorporated (NYSE:HUBB). These stocks are Mirati Therapeutics, Inc. (NASDAQ:MRTX), Teck Resources Ltd (NYSE:TECK), Quanta Services Inc (NYSE:PWR), AptarGroup, Inc. (NYSE:ATR), Howmet Aerospace Inc. (NYSE:HWM), Newell Brands Inc. (NASDAQ:NWL), and Americold Realty Trust (NYSE:COLD). This group of stocks' market caps resemble HUBB's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MRTX,38,2389684,2 TECK,27,565206,2 PWR,32,824167,1 ATR,28,241807,2 HWM,35,2448447,5 NWL,27,1266887,-6 COLD,30,273605,1 Average,31,1144258,1 [/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 $1144 million. That figure was $352 million in HUBB's case. Mirati Therapeutics, Inc. (NASDAQ:MRTX) is the most popular stock in this table. On the other hand Teck Resources Ltd (NYSE:TECK) is the least popular one with only 27 bullish hedge fund positions. Hubbell Incorporated (NYSE:HUBB) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for HUBB is 44. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 33.3% in 2020 through December 18th and still beat the market by 16.4 percentage points. A small number of hedge funds were also right about betting on HUBB as the stock returned 14.4% since the end of the third quarter (through 12/18) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.