Hedge Funds Are Betting On Whirlpool Corporation (WHR)

The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on June 30th. We at Insider Monkey have made an extensive database of more than 873 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Whirlpool Corporation (NYSE:WHR) based on those filings.

Whirlpool Corporation (NYSE:WHR) has seen an increase in hedge fund sentiment of late. Whirlpool Corporation (NYSE:WHR) was in 32 hedge funds’ portfolios at the end of June. The all time high for this statistic is 38. There were 28 hedge funds in our database with WHR positions at the end of the first quarter. Our calculations also showed that WHR isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.

Tom Gayner

Tom Gayner of Markel Gayner Asset Management

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 take a look at the latest hedge fund action surrounding Whirlpool Corporation (NYSE:WHR).

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

At second quarter’s end, a total of 32 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 14% from the previous quarter. On the other hand, there were a total of 26 hedge funds with a bullish position in WHR a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).

The largest stake in Whirlpool Corporation (NYSE:WHR) was held by Greenhaven Associates, which reported holding $597 million worth of stock at the end of June. It was followed by Lyrical Asset Management with a $326.2 million position. Other investors bullish on the company included Markel Gayner Asset Management, Citadel Investment Group, and AQR Capital Management. In terms of the portfolio weights assigned to each position Greenhaven Associates allocated the biggest weight to Whirlpool Corporation (NYSE:WHR), around 17.45% of its 13F portfolio. Jones Road Capital Management is also relatively very bullish on the stock, dishing out 5.5 percent of its 13F equity portfolio to WHR.

As industrywide interest jumped, specific money managers were breaking ground themselves. Jones Road Capital Management, managed by Aaron Wertentheil, assembled the biggest call position in Whirlpool Corporation (NYSE:WHR). Jones Road Capital Management had $16.4 million invested in the company at the end of the quarter. Aaron Wertentheil’s Jones Road Capital Management also made a $4.7 million investment in the stock during the quarter. The other funds with brand new WHR positions are David Harding’s Winton Capital Management, Paul Tudor Jones’s Tudor Investment Corp, and Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Whirlpool Corporation (NYSE:WHR) but similarly valued. We will take a look at American Airlines Group Inc (NASDAQ:AAL), Centrais Elétricas Brasileiras S.A. – Eletrobrás (NYSE:EBR), UWM Holdings Corporation (NYSE:UWMC), Equity Lifestyle Properties, Inc. (NYSE:ELS), Advance Auto Parts, Inc. (NYSE:AAP), W.P. Carey Inc. (NYSE:WPC), and Mohawk Industries, Inc. (NYSE:MHK). This group of stocks’ market values are similar to WHR’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
AAL 25 620239 -7
EBR 5 3151 0
UWMC 20 66732 1
ELS 25 477660 -4
AAP 34 849879 -9
WPC 29 147455 6
MHK 44 1311640 8
Average 26 496679 -0.7

View table here if you experience formatting issues.

As you can see these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $497 million. That figure was $1176 million in WHR’s case. Mohawk Industries, Inc. (NYSE:MHK) is the most popular stock in this table. On the other hand Centrais Elétricas Brasileiras S.A. – Eletrobrás (NYSE:EBR) is the least popular one with only 5 bullish hedge fund positions. Whirlpool Corporation (NYSE:WHR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for WHR is 68.9. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 24.9% in 2021 through October 15th and beat the market again by 4.5 percentage points. Unfortunately WHR wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on WHR were disappointed as the stock returned -4.6% since the end of June (through 10/15) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.