Did Hedge Funds Catch A Break With Corning Incorporated (GLW)?

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Corning Incorporated (NYSE:GLW) based on that data and determine whether they were really smart about the stock.

Corning Incorporated (NYSE:GLW) was in 40 hedge funds’ portfolios at the end of September. The all time high for this statistic is 42. GLW investors should pay attention to a decrease in activity from the world’s largest hedge funds recently. There were 42 hedge funds in our database with GLW holdings at the end of June. Our calculations also showed that GLW isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

Donald Yacktman of Yacktman Asset Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. Now let’s take a look at the recent hedge fund action surrounding Corning Incorporated (NYSE:GLW).

Do Hedge Funds Think GLW Is A Good Stock To Buy Now?

At third quarter’s end, a total of 40 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -5% from the previous quarter. The graph below displays the number of hedge funds with bullish position in GLW over the last 25 quarters. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

Is GLW A Good Stock To Buy?

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital has the biggest position in Corning Incorporated (NYSE:GLW), worth close to $111.7 million, accounting for 0.1% of its total 13F portfolio. On Arrowstreet Capital’s heels is Renaissance Technologies, which holds a $64.9 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism consist of Israel Englander’s Millennium Management, Donald Yacktman’s Yacktman Asset Management and Phill Gross and Robert Atchinson’s Adage Capital Management. In terms of the portfolio weights assigned to each position Valueworks LLC allocated the biggest weight to Corning Incorporated (NYSE:GLW), around 2.23% of its 13F portfolio. Beech Hill Partners is also relatively very bullish on the stock, setting aside 1.88 percent of its 13F equity portfolio to GLW.

Seeing as Corning Incorporated (NYSE:GLW) has faced declining sentiment from the aggregate hedge fund industry, we can see that there is a sect of hedgies that slashed their positions entirely heading into Q4. Intriguingly, Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors said goodbye to the biggest stake of the “upper crust” of funds watched by Insider Monkey, worth an estimated $13.5 million in stock. Ray Dalio’s fund, Bridgewater Associates, also dumped its stock, about $9.4 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 2 funds heading into Q4.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Corning Incorporated (NYSE:GLW) but similarly valued. We will take a look at Fomento Economico Mexicano SAB (NYSE:FMX), Ferguson plc (NYSE:FERG), State Street Corporation (NYSE:STT), AvalonBay Communities Inc (NYSE:AVB), Corteva, Inc. (NYSE:CTVA), Seagen Inc. (NASDAQ:SGEN), and Equifax Inc. (NYSE:EFX). This group of stocks’ market values are similar to GLW’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
FMX 13 610447 0
FERG 10 6564548 -1
STT 42 1479764 5
AVB 28 376882 2
CTVA 41 1161923 7
SGEN 40 9471190 3
EFX 43 3360148 6
Average 31 3289272 3.1

View table here if you experience formatting issues.

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 $3289 million. That figure was $408 million in GLW’s case. Equifax Inc. (NYSE:EFX) is the most popular stock in this table. On the other hand Ferguson plc (NYSE:FERG) is the least popular one with only 10 bullish hedge fund positions. Corning Incorporated (NYSE:GLW) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for GLW is 77. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. Hedge funds were also right about betting on GLW as the stock returned 15.9% since the end of Q3 (through 1/31) 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.