How do we determine whether Worthington Industries, Inc. (NYSE:WOR) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
Is Worthington Industries, Inc. (NYSE:WOR) a great stock to buy now? The best stock pickers are becoming hopeful. The number of long hedge fund positions moved up by one recently. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as South Jersey Industries Inc (NYSE:SJI), First Busey Corporation (NASDAQ:BUSE), and Halozyme Therapeutics, Inc. (NASDAQ:HALO) to gather more data points.
According to most stock holders, hedge funds are seen as unimportant, outdated investment tools of the past. While there are over 8,000 funds trading today, hedge fund experts at Insider Monkey look at the crème de la crème of this club, approximately 700 funds. These investment experts control most of the smart money’s total asset base, and by keeping an eye on their best stock picks, Insider Monkey has found many investment strategies that have historically outrun the market. Insider Monkey’s small-cap hedge fund strategy outpaced the S&P 500 index by 12 percentage points annually for a decade in its backtests.
With all of this in mind, let’s review the recent action encompassing Worthington Industries, Inc. (NYSE:WOR).
What have hedge funds been doing with Worthington Industries, Inc. (NYSE:WOR)?
At the end of Q3, a total of 14 of the hedge funds tracked by Insider Monkey were long in this stock, an increase of 8% from the second quarter. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Chuck Royce’s Royce & Associates has the biggest position in Worthington Industries, Inc. (NYSE:WOR), worth close to $29.6 million, amounting to 0.2% of its total 13F portfolio. On Royce & Associates’ heels is Millennium Management, led by Israel Englander, holding a $13.5 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Some other members of the smart money with similar optimism consist of Cliff Asness’ AQR Capital Management, Ken Griffin’s Citadel Investment Group, and D E Shaw.
As industrywide interest jumped, key money managers were breaking ground themselves. Ellington, managed by Mike Vranos, created the most valuable position in Worthington Industries, Inc. (NYSE:WOR). Ellington had $0.6 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also made a $0.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Chao Ku’s Nine Chapters Capital Management, and David Costen Haley’s HBK Investments.
Let’s also take a look at hedge fund activity in other stocks similar to Worthington Industries, Inc. (NYSE:WOR). We will take a look at South Jersey Industries Inc (NYSE:SJI), First Busey Corporation (NASDAQ:BUSE), Halozyme Therapeutics, Inc. (NASDAQ:HALO), and Sanmina Corp (NASDAQ:SANM). This group of stocks’ market values resemble Worthington Industries, Inc. (NYSE:WOR)’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $114 million, over 50% greater than the $75 million invested in Worthington Industries. Halozyme Therapeutics, Inc. (NASDAQ:HALO) is the most popular stock in this table. On the other hand First Busey Corporation (NASDAQ:BUSE) is the least popular one with only eight bullish hedge fund positions. Worthington Industries, Inc. (NYSE:WOR) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard Halozyme Therapeutics, Inc. (NASDAQ:HALO) might be a better candidate to consider a long position in.