Hedge Funds Are Selling FMC Technologies, Inc. (FTI)

Is FMC Technologies, Inc. (NYSE:FTI) a good investment right now? We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, expert networks, and get tips from industry insiders. They fail miserably sometimes, but historically their consensus stock picks outperformed the market after adjusting for known risk factors.

FMC Technologies, Inc. has experienced a decrease in activity from the world’s largest hedge funds of late. FTI was in 32 hedge funds’ portfolios at the end of the third quarter of 2015. There were 37 hedge funds in our database with FTI positions at the end of the previous quarter. At the end of this article we will also compare FTI to other stocks, including Splunk Inc (NASDAQ:SPLK), Pinnacle West Capital Corporation (NYSE:PNW), and Aramark (NYSE:ARMK) to get a better sense of its popularity.

In the 21st century investor’s toolkit there are dozens of tools investors employ to size up stocks. A pair of the most underrated tools are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the best picks of the elite hedge fund managers can outperform the market by a healthy margin (see the details here).

Now, we’re going to analyze the recent action surrounding FMC Technologies, Inc. (NYSE:FTI).

How are hedge funds trading FMC Technologies, Inc. (NYSE:FTI)?

Heading into Q4, a total of 32 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -14% from the second quarter. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their stakes significantly (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Citadel Investment Group, managed by Ken Griffin, holds the largest position in FMC Technologies, Inc. (NYSE:FTI). Citadel Investment Group has a $197 million position in the stock, comprising 0.2% of its 13F portfolio. Coming in second is Millennium Management, managed by Israel Englander, which holds a $157.4 million position; 0.3% of its 13F portfolio is allocated to the company. Other professional money managers that hold long positions contain D. E. Shaw’s D E Shaw, Dmitry Balyasny’s Balyasny Asset Management and Anand Parekh’s Alyeska Investment Group.

Judging by the fact that FMC Technologies, Inc. (NYSE:FTI) has experienced a declining sentiment from the smart money, we can see that there is a sect of fund managers who were dropping their positions entirely by the end of the third quarter. At the top of the heap, Jamie Zimmerman’s Litespeed Management sold off the biggest stake of the “upper crust” of funds monitored by Insider Monkey, valued at about $64.6 million in stock. Larry Foley and Paul Farrell’s fund, Bronson Point Partners, also dropped its stock, about $26.3 million worth. These transactions are interesting, as total hedge fund interest fell by 5 funds by the end of the third quarter.

Let’s now take a look at hedge fund activity in other stocks similar to FMC Technologies, Inc. (NYSE:FTI). These stocks are Splunk Inc (NASDAQ:SPLK), Pinnacle West Capital Corporation (NYSE:PNW), Aramark (NYSE:ARMK), and DENTSPLY International Inc. (NASDAQ:XRAY). All of these stocks’ market caps match FTI’s market cap.

As you can see these stocks had an average of 31 hedge funds with bullish positions and the average amount invested in these stocks was $1.08 billion. That figure was $1.22 billion in FTI’s case. Aramark (NYSE:ARMK) is the most popular stock in this table, while Pinnacle West Capital Corporation (NYSE:PNW) is the least popular one with only 18 bullish hedge fund positions. FMC Technologies, Inc. (NYSE:FTI) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ARMK might be a better candidate to consider a long position.