Five Consumer Durable Stocks Hedge Funds Are Bullish On

Consumer durable goods are defined as the products that yield utility over time and do not wear out quickly. According to the latest Commerce Department report, orders for durable goods surged by 4.4% in July, rebounding from a 4.2% decline in June. Analysts think that Consumer Durables sector will gain from lower GST rates and savings in logistics and transportation costs in the coming months. In this article, we are going to take a look at five most popular consumer durable stocks among the smart money investors from our database.

We believe that imitating hedge funds and other large institutional investors can be helpful in identifying stocks capable of outperforming the broader market. Through extensive research that covered portfolios of several hundred large investors between 1999 and 2012, we determined that following the small-cap stocks that large money managers are collectively bullish on, can generate monthly returns nearly 1.0 percentage points above the market (see more details here). 

Mohawk Industries, Inc. (NYSE:MHK)

– Number of Hedge Fund Shareholders (as of June 30): 47

– Total Value of Hedge Funds’ Holdings (as of June 30): $2.75 billion

– Hedge Funds’ Holdings as Percent of Float (as of June 30): 19.60%

A total of 47 hedge funds tracked by us were long Mohawk Industries, Inc. (NYSE:MHK) at the end of the second quarter, versus 49 hedge funds a quarter earlier. The stock has gained over 10% year-to-date. Mohawk Industries registered record profit and sales in the first quarter, after which it planned $600 million of capital investments for the year. The company reported second-quarter EPS of $3.47 on $2.31 billion in revenue, versus analysts’ estimates of EPS of $3.37 on revenue of $2.35 billion. For the third quarter, Mohawk Industries, Inc. (NYSE:MHK) expects EPS  between $3.40 and $3.49 EPS, versus the consensus estimate of $3.37. Dan Loeb’s Third Point owns 1.5 million shares of Mohawk, as of the end of the second quarter.

Ball Corporation (NYSE:BLL)

– Number of Hedge Fund Shareholders (as of June 30): 42

– Total Value of Hedge Funds’ Holdings (as of June 30): $2.11 billion

– Hedge Funds’ Holdings as Percent of Float (as of June 30): 20.60%

Ball Corporation (NYSE:BLL) shares have gained over 8% since the start of the year. The Colorado-based packaging and aerospace company posted a mixed second quarter, but provided an upbeat guidance. The company earned $1.05 per share, up by 18% year-over-year, and above the Street’s estimates of $0.99, but revenue of $2.03 billion was lower than the consensus estimate of $2.15 billion. At the end of June, Ball Corporation (NYSE:BLL) completed its $6.1 billion acquisition of British packaging company Rexam. Richard Perry’s Perry Capital owns over 2.69 million shares of Ball Corporation, as of the end of the June quarter.

On the next page, we will continue our discussion on hedge funds’ moves surrounding consumer durable stocks.

Tempur Sealy International Inc (NYSE:TPX)

– Number of Hedge Fund Shareholders (as of June 30): 37

– Total Value of Hedge Funds’ Holdings (as of June 30): $1.15 billion

– Hedge Funds’ Holdings as Percent of Float (as of June 30): 34.40%

Hedge funds showed increased interest towards the Kentucky-based bedding company Tempur Sealy International Inc (NYSE:TPX) in the June quarter amid a rise in the housing market. Among the investors we track, 37 funds were long Tempur Sealy International Inc (NYSE:TPX) at the end of June, up from 33 funds a quarter earlier. Tempur Sealy’s shares are up by 30% in the past month, and have gained over 11% year-to-date. For the second quarter, Tempur Sealy International Inc (NYSE:TPX) reported EPS of $0.92 on revenue of $804.4 million, crushing the estimates of $0.69 EPS on $785.4 million revenue. For the full year, Tempur Sealy expects adjusted EBITDA to come in between $525 million and $550 million.

Whirlpool Corporation (NYSE:WHR)

– Number of Hedge Fund Shareholders (as of June 30): 37

– Total Value of Hedge Funds’ Holdings (as of June 30): $1.71 billion

– Hedge Funds’ Holdings as Percent of Float (as of June 30): 13.50%

A total of 37 funds tracked by Insider Monkey held shares of the Michigan-based home appliance company Whirlpool Corporation (NYSE:WHR) at the end of the second quarter. The stock is up by over 23% so far this year. Whirlpool Corporation earned $3.50 per share on $5.21 billion revenue in the second quarter, better than analysts’ forecasts of $3.37 in EPS and $5.13 billion in revenue. For the full fiscal 2016, Whirlpool expects EPS of $14.25 to $14.75, versus the consensus estimate of $14.69. Edgar Wachenheim’s Greenhaven Associates owns around 2.62 million shares of Whirlpool Corporation (NYSE:WHR).

Graphic Packaging Holding Company (NYSE:GPK)

– Number of Hedge Fund Shareholders (as of June 30): 36

– Total Value of Hedge Funds’ Holdings (as of June 30): $1.04 billion

– Hedge Funds’ Holdings as Percent of Float (as of June 30): 25.80%

According to the latest 13F data, 36 funds tracked by us held $1.04 billion worth of Graphic Packaging Holding Company (NYSE:GPK)’s shares at the end of the June. The stock is up by over 12% since the start of the year. Graphic Packaging Holding Company (NYSE:GPK) hit a new 52-week high of $14.64 last week. The company recently declared a quarterly dividend of $0.05 per share, which will be payable on October 5. In the second quarter, Graphic Packaging Holding Company (NYSE:GPK) earned $0.19 per share on $1.1 billion, in-line with the analysts’ estimates.

 Disclosure: None