Is Iron Mountain Incorporated (IRM) A Good Stock To Buy?
The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Iron Mountain Incorporated (NYSE:IRM).
Iron Mountain Incorporated (NYSE:IRM) shares haven't seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 14 hedge funds' portfolios at the end of the third quarter of 2019. The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as FactSet Research Systems Inc. (NYSE:FDS), National Retail Properties, Inc. (NYSE:NNN), and Formula One Group (NASDAQ:FWONA) to gather more data points. Our calculations also showed that IRM isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
According to most shareholders, hedge funds are seen as underperforming, old investment tools of the past. While there are greater than 8000 funds trading at the moment, Our researchers look at the top tier of this group, approximately 750 funds. Most estimates calculate that this group of people command the lion's share of the hedge fund industry's total asset base, and by paying attention to their matchless equity investments, Insider Monkey has found a few investment strategies that have historically outpaced the S&P 500 index. Insider Monkey's flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points per annum since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
[caption id="attachment_746830" align="aligncenter" width="473"]
Matthew Hulsizer of PEAK6 Capital[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world's largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds' buy/sell signals. Let's take a glance at the fresh hedge fund action regarding Iron Mountain Incorporated (NYSE:IRM).
Hedge fund activity in Iron Mountain Incorporated (NYSE:IRM)
Heading into the fourth quarter of 2019, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in IRM over the last 17 quarters. With the smart money's capital changing hands, there exists a few noteworthy hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Matthew Hulsizer's PEAK6 Capital Management has the largest call position in Iron Mountain Incorporated (NYSE:IRM), worth close to $15.8 million, comprising 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Two Sigma Advisors, managed by John Overdeck and David Siegel, which holds a $14.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining professional money managers that are bullish consist of Israel Englander's Millennium Management, Phill Gross and Robert Atchinson's Adage Capital Management and Ken Griffin's Citadel Investment Group. In terms of the portfolio weights assigned to each position Stevens Capital Management allocated the biggest weight to Iron Mountain Incorporated (NYSE:IRM), around 0.18% of its 13F portfolio. Navellier & Associates is also relatively very bullish on the stock, designating 0.15 percent of its 13F equity portfolio to IRM.
Because Iron Mountain Incorporated (NYSE:IRM) has faced bearish sentiment from hedge fund managers, we can see that there exists a select few hedgies that slashed their positions entirely heading into Q4. At the top of the heap, Mike Vranos's Ellington cut the largest investment of the "upper crust" of funds watched by Insider Monkey, totaling an estimated $0.9 million in stock. Renee Yao's fund, Neo Ivy Capital, also dumped its stock, about $0.7 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now review hedge fund activity in other stocks similar to Iron Mountain Incorporated (NYSE:IRM). We will take a look at FactSet Research Systems Inc. (NYSE:FDS), National Retail Properties, Inc. (NYSE:NNN), Formula One Group (NASDAQ:FWONA), and DaVita Inc (NYSE:DVA). All of these stocks' market caps are similar to IRM's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position FDS,19,262033,0 NNN,20,275561,4 FWONA,19,371712,1 DVA,34,3079581,-2 Average,23,997222,0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $997 million. That figure was $58 million in IRM's case. DaVita Inc (NYSE:DVA) is the most popular stock in this table. On the other hand FactSet Research Systems Inc. (NYSE:FDS) is the least popular one with only 19 bullish hedge fund positions. Compared to these stocks Iron Mountain Incorporated (NYSE:IRM) is even less popular than FDS. Hedge funds dodged a bullet by taking a bearish stance towards IRM. Our calculations showed that the top 20 most popular hedge fund stocks returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately IRM wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); IRM investors were disappointed as the stock returned -0.8% during the fourth quarter (through the end of November) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market so far in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
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