The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought Jones Lang LaSalle Inc (NYSE:JLL) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.
Jones Lang LaSalle Inc (NYSE:JLL) shareholders have witnessed a decrease in support from the world’s most elite money managers recently. Jones Lang LaSalle Inc (NYSE:JLL) was in 23 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 31. There were 26 hedge funds in our database with JLL holdings at the end of March. Our calculations also showed that JLL isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. 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 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers after its stock price crashed. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website to get excerpts of these letters in your inbox. Now we’re going to take a look at the recent hedge fund action encompassing Jones Lang LaSalle Inc (NYSE:JLL).
Hedge fund activity in Jones Lang LaSalle Inc (NYSE:JLL)
Heading into the third quarter of 2020, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -12% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards JLL over the last 20 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Generation Investment Management was the largest shareholder of Jones Lang LaSalle Inc (NYSE:JLL), with a stake worth $504.6 million reported as of the end of September. Trailing Generation Investment Management was Ariel Investments, which amassed a stake valued at $83.6 million. Diamond Hill Capital, Motley Fool Asset Management, and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Marlowe Partners allocated the biggest weight to Jones Lang LaSalle Inc (NYSE:JLL), around 4.37% of its 13F portfolio. Generation Investment Management is also relatively very bullish on the stock, setting aside 2.91 percent of its 13F equity portfolio to JLL.
Seeing as Jones Lang LaSalle Inc (NYSE:JLL) has experienced falling interest from the entirety of the hedge funds we track, it’s safe to say that there were a few money managers that elected to cut their full holdings heading into Q3. Interestingly, John Khoury’s Long Pond Capital sold off the biggest stake of the “upper crust” of funds monitored by Insider Monkey, valued at close to $25.3 million in stock, and Seth Fischer’s Oasis Management was right behind this move, as the fund sold off about $6.1 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 3 funds heading into Q3.
Let’s now review hedge fund activity in other stocks similar to Jones Lang LaSalle Inc (NYSE:JLL). These stocks are Woori Financial Group Inc. (NYSE:WF), Corelogic Inc (NYSE:CLGX), Columbia Sportswear Company (NASDAQ:COLM), United Therapeutics Corporation (NASDAQ:UTHR), Levi Strauss & Co. (NYSE:LEVI), FLIR Systems, Inc. (NASDAQ:FLIR), and Axalta Coating Systems Ltd (NYSE:AXTA). All of these stocks’ market caps are closest to JLL’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 28.4 hedge funds with bullish positions and the average amount invested in these stocks was $562 million. That figure was $676 million in JLL’s case. Axalta Coating Systems Ltd (NYSE:AXTA) is the most popular stock in this table. On the other hand Woori Financial Group Inc. (NYSE:WF) is the least popular one with only 5 bullish hedge fund positions. Jones Lang LaSalle Inc (NYSE:JLL) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for JLL is 45.7. 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 negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 24.8% in 2020 through the end of September and surpassed the market by 19.3 percentage points. Unfortunately JLL wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); JLL investors were disappointed as the stock returned -7.5% in the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.