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At Insider Monkey, we pore over the filings of nearly 887 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we've gathered as a result gives us access to a wealth of collective knowledge based on these firms' portfolio holdings as of December 31st. In this article, we will use that wealth of knowledge to determine whether or not Mettler-Toledo International Inc. (NYSE:MTD) makes for a good investment right now.
Is MTD stock a buy? Mettler-Toledo International Inc. (NYSE:MTD) was in 29 hedge funds' portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 31. MTD has seen a decrease in support from the world's most elite money managers recently. There were 30 hedge funds in our database with MTD positions at the end of the third quarter. Our calculations also showed that MTD isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).
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Joel Greenblatt of Gotham Asset Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we heard that billionaire Peter Thiel is backing this psychedelic-drug startup. So, we are taking a closer look at this space. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. 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. With all of this in mind we're going to check out the latest hedge fund action regarding Mettler-Toledo International Inc. (NYSE:MTD).
Do Hedge Funds Think MTD Is A Good Stock To Buy Now?
At the end of December, a total of 29 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -3% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards MTD over the last 22 quarters. With hedge funds' capital changing hands, there exists a select group of notable hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).
The largest stake in Mettler-Toledo International Inc. (NYSE:MTD) was held by Impax Asset Management, which reported holding $214.1 million worth of stock at the end of December. It was followed by AQR Capital Management with a $190.7 million position. Other investors bullish on the company included Chilton Investment Company, Echo Street Capital Management, and Arrowstreet Capital. In terms of the portfolio weights assigned to each position Chilton Investment Company allocated the biggest weight to Mettler-Toledo International Inc. (NYSE:MTD), around 3.93% of its 13F portfolio. Impax Asset Management is also relatively very bullish on the stock, dishing out 1.36 percent of its 13F equity portfolio to MTD.
Due to the fact that Mettler-Toledo International Inc. (NYSE:MTD) has faced falling interest from the smart money, it's safe to say that there were a few fund managers that decided to sell off their entire stakes by the end of the fourth quarter. Intriguingly, Robert Joseph Caruso's Select Equity Group said goodbye to the largest investment of all the hedgies tracked by Insider Monkey, comprising an estimated $13.4 million in stock. Richard Schimel and Lawrence Sapanski's fund, Cinctive Capital Management, also sold off its stock, about $3.1 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 1 funds by the end of the fourth quarter.
Let's also examine hedge fund activity in other stocks similar to Mettler-Toledo International Inc. (NYSE:MTD). These stocks are Sirius XM Holdings Inc (NASDAQ:SIRI), AutoZone, Inc. (NYSE:AZO), Welltower Inc. (NYSE:WELL), Waste Connections, Inc. (NYSE:WCN), Marathon Petroleum Corp (NYSE:MPC), Zscaler, Inc. (NASDAQ:ZS), and Ecopetrol S.A. (NYSE:EC). This group of stocks' market values are closest to MTD's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SIRI,32,670253,-5 AZO,44,1445833,-9 WELL,26,538410,1 WCN,35,626810,3 MPC,43,1883612,-13 ZS,35,1208264,9 EC,7,102902,0 Average,31.7,925155,-2 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.7 hedge funds with bullish positions and the average amount invested in these stocks was $925 million. That figure was $850 million in MTD's case. AutoZone, Inc. (NYSE:AZO) is the most popular stock in this table. On the other hand Ecopetrol S.A. (NYSE:EC) is the least popular one with only 7 bullish hedge fund positions. Mettler-Toledo International Inc. (NYSE:MTD) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for MTD is 61.8. 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 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 12.2% in 2021 through April 12th and surpassed the market again by 1.5 percentage points. Unfortunately MTD wasn't nearly as popular as these 30 stocks (hedge fund sentiment was quite bearish); MTD investors were disappointed as the stock returned 6.9% since the end of December (through 4/12) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.