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The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the fourth quarter, which unveil their equity positions as of December 31st. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Ingredion Incorporated (NYSE:INGR).
Is INGR stock a buy? Ingredion Incorporated (NYSE:INGR) investors should pay attention to an increase in hedge fund sentiment of late. Ingredion Incorporated (NYSE:INGR) was in 24 hedge funds' portfolios at the end of December. The all time high for this statistic is 29. Our calculations also showed that INGR isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 197% since March 2017 and outperformed the S&P 500 ETFs by more than 124 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Donald Yacktman of Yacktman Asset Management
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Do Hedge Funds Think INGR Is A Good Stock To Buy Now?
At fourth quarter's end, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from the third quarter of 2020. The graph below displays the number of hedge funds with bullish position in INGR over the last 22 quarters. With hedge funds' positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Yacktman Asset Management, managed by Donald Yacktman, holds the largest position in Ingredion Incorporated (NYSE:INGR). Yacktman Asset Management has a $188.5 million position in the stock, comprising 2.3% of its 13F portfolio. The second largest stake is held by AQR Capital Management, led by Cliff Asness, holding a $67 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other professional money managers that are bullish consist of Israel Englander's Millennium Management, Bernard Horn's Polaris Capital Management and D. E. Shaw's D E Shaw. In terms of the portfolio weights assigned to each position Yacktman Asset Management allocated the biggest weight to Ingredion Incorporated (NYSE:INGR), around 2.33% of its 13F portfolio. Polaris Capital Management is also relatively very bullish on the stock, setting aside 1.58 percent of its 13F equity portfolio to INGR.
Consequently, specific money managers have been driving this bullishness. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, created the most valuable position in Ingredion Incorporated (NYSE:INGR). Arrowstreet Capital had $9.3 million invested in the company at the end of the quarter. Minhua Zhang's Weld Capital Management also made a $1.6 million investment in the stock during the quarter. The following funds were also among the new INGR investors: Ryan Tolkin (CIO)'s Schonfeld Strategic Advisors, Ben Levine, Andrew Manuel and Stefan Renold's LMR Partners, and Greg Eisner's Engineers Gate Manager.
Let's now take a look at hedge fund activity in other stocks similar to Ingredion Incorporated (NYSE:INGR). We will take a look at Marathon Oil Corporation (NYSE:MRO), Primerica, Inc. (NYSE:PRI), Iridium Communications Inc. (NASDAQ:IRDM), Everbridge, Inc. (NASDAQ:EVBG), Stifel Financial Corp. (NYSE:SF), Varonis Systems Inc (NASDAQ:VRNS), and Manpowergroup Inc (NYSE:MAN). All of these stocks' market caps match INGR's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MRO,26,317417,10 PRI,31,468219,-4 IRDM,18,431524,3 EVBG,36,1247361,6 SF,18,151609,0 VRNS,30,532551,1 MAN,31,350935,-3 Average,27.1,499945,1.9 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.1 hedge funds with bullish positions and the average amount invested in these stocks was $500 million. That figure was $420 million in INGR's case. Everbridge, Inc. (NASDAQ:EVBG) is the most popular stock in this table. On the other hand Iridium Communications Inc. (NASDAQ:IRDM) is the least popular one with only 18 bullish hedge fund positions. Ingredion Incorporated (NYSE:INGR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for INGR is 47.5. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and still beat the market by 0.9 percentage points. A small number of hedge funds were also right about betting on INGR as the stock returned 18.7% since the end of the fourth quarter (through 4/19) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.