U.S. Markets closed

Is Iron Mountain Incorporated (IRM) A Good Stock To Buy?

Asma UL Husna

The 700+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of June 28. 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 Iron Mountain Incorporated (NYSE:IRM).

Is Iron Mountain Incorporated (NYSE:IRM) a cheap investment today? Prominent investors are in a pessimistic mood. The number of bullish hedge fund bets went down by 4 lately. Our calculations also showed that IRM isn't among the 30 most popular stocks among hedge funds (see the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

5 Most Popular Stocks Among Hedge Funds

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 flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

IRM_oct2019

Unlike this former hedge fund manager who is convinced Dow will soar past 40000, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let's analyze the recent hedge fund action surrounding Iron Mountain Incorporated (NYSE:IRM).

What have hedge funds been doing with Iron Mountain Incorporated (NYSE:IRM)?

Heading into the third quarter of 2019, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -22% from the previous quarter. The graph below displays the number of hedge funds with bullish position in IRM over the last 16 quarters. With the smart money's positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their stakes significantly (or already accumulated large positions).

GOTHAM ASSET MANAGEMENT

The largest stake in Iron Mountain Incorporated (NYSE:IRM) was held by Two Sigma Advisors, which reported holding $15.1 million worth of stock at the end of March. It was followed by Citadel Investment Group with a $14.1 million position. Other investors bullish on the company included PEAK6 Capital Management, Adage Capital Management, and Millennium Management.

Due to the fact that Iron Mountain Incorporated (NYSE:IRM) has experienced a decline in interest from the entirety of the hedge funds we track, logic holds that there were a few hedgies who were dropping their entire stakes in the second quarter. Interestingly, Paul Marshall and Ian Wace's Marshall Wace LLP sold off the largest investment of the "upper crust" of funds tracked by Insider Monkey, valued at about $3.6 million in stock. Renaissance Technologies, also sold off its stock, about $3.2 million worth. These moves are interesting, as total hedge fund interest dropped by 4 funds in the second quarter.

Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Iron Mountain Incorporated (NYSE:IRM) but similarly valued. These stocks are Kirkland Lake Gold Ltd. (NYSE:KL), Snap-on Incorporated (NYSE:SNA), AGNC Investment Corp. (NASDAQ:AGNC), and Beyond Meat, Inc. (NASDAQ:BYND). All of these stocks' market caps resemble IRM's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position KL,21,346566,-4 SNA,25,567704,0 AGNC,23,80577,8 BYND,16,67057,16 Average,21.25,265476,5 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 21.25 hedge funds with bullish positions and the average amount invested in these stocks was $265 million. That figure was $39 million in IRM's case. Snap-on Incorporated (NYSE:SNA) is the most popular stock in this table. On the other hand Beyond Meat, Inc. (NASDAQ:BYND) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Iron Mountain Incorporated (NYSE:IRM) is even less popular than BYND. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. A small number of hedge funds were also right about betting on IRM, though not to the same extent, as the stock returned 5.4% during the third quarter and outperformed the market as well.

Disclosure: None. This article was originally published at Insider Monkey.

Related Content