The 800+ 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 30th. 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 Lowe's Companies, Inc. (NYSE:LOW).
Lowe's Companies, Inc. (NYSE:LOW) was in 63 hedge funds' portfolios at the end of June. The all time high for this statistic is 89. LOW investors should be aware of an increase in enthusiasm from smart money in recent months. There were 61 hedge funds in our database with LOW holdings at the end of March. Our calculations also showed that LOW isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Bill Ackman of Pershing Square
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Keeping this in mind let's check out the latest hedge fund action surrounding Lowe's Companies, Inc. (NYSE:LOW).
Do Hedge Funds Think LOW Is A Good Stock To Buy Now?
At second quarter's end, a total of 63 of the hedge funds tracked by Insider Monkey were long this stock, a change of 3% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards LOW over the last 24 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists an "upper tier" of key hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Pershing Square, managed by Bill Ackman, holds the number one position in Lowe's Companies, Inc. (NYSE:LOW). Pershing Square has a $1.967 billion position in the stock, comprising 18.4% of its 13F portfolio. The second most bullish fund manager is Soroban Capital Partners, led by Eric W. Mandelblatt and Gaurav Kapadia, holding a $826.9 million position; 7% of its 13F portfolio is allocated to the stock. Some other peers with similar optimism comprise Ken Griffin's Citadel Investment Group, Cliff Asness's AQR Capital Management and Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital. In terms of the portfolio weights assigned to each position Pershing Square allocated the biggest weight to Lowe's Companies, Inc. (NYSE:LOW), around 18.37% of its 13F portfolio. Two Creeks Capital Management is also relatively very bullish on the stock, designating 9.56 percent of its 13F equity portfolio to LOW.
As industrywide interest jumped, some big names have been driving this bullishness. Paloma Partners, managed by Donald Sussman, assembled the biggest call position in Lowe's Companies, Inc. (NYSE:LOW). Paloma Partners had $28.3 million invested in the company at the end of the quarter. Ben Levine, Andrew Manuel and Stefan Renold's LMR Partners also made a $15.8 million investment in the stock during the quarter. The following funds were also among the new LOW investors: Michael Gelband's ExodusPoint Capital, Benjamin A. Smith's Laurion Capital Management, and Robert Pohly's Samlyn Capital.
Let's now review hedge fund activity in other stocks similar to Lowe's Companies, Inc. (NYSE:LOW). These stocks are Rio Tinto Group (NYSE:RIO), HDFC Bank Limited (NYSE:HDB), Intuit Inc. (NASDAQ:INTU), BlackRock, Inc. (NYSE:BLK), American Express Company (NYSE:AXP), Starbucks Corporation (NASDAQ:SBUX), and Sanofi (NASDAQ:SNY). This group of stocks' market values are closest to LOW's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RIO,21,1420451,-4 HDB,39,1731917,12 INTU,66,5382791,-2 BLK,47,1282801,5 AXP,52,28660485,-1 SBUX,63,4757968,2 SNY,16,1261299,1 Average,43.4,6356816,1.9 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 43.4 hedge funds with bullish positions and the average amount invested in these stocks was $6357 million. That figure was $4968 million in LOW's case. Intuit Inc. (NASDAQ:INTU) is the most popular stock in this table. On the other hand Sanofi (NASDAQ:SNY) is the least popular one with only 16 bullish hedge fund positions. Lowe's Companies, Inc. (NYSE:LOW) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for LOW is 75.2. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 25.7% in 2021 through September 27th and still beat the market by 6.2 percentage points. Hedge funds were also right about betting on LOW as the stock returned 9% since the end of Q2 (through 9/27) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
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