Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of June. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Lincoln Electric Holdings, Inc. (NASDAQ:LECO), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Lincoln Electric Holdings, Inc. (NASDAQ:LECO) was in 20 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 26. LECO has experienced an increase in support from the world’s most elite money managers recently. There were 19 hedge funds in our database with LECO holdings at the end of March. Our calculations also showed that LECO isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Dmitry Balyasny of Balyasny 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. With all of this in mind we’re going to view the new hedge fund action encompassing Lincoln Electric Holdings, Inc. (NASDAQ:LECO).
Do Hedge Funds Think LECO Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of 5% from the first quarter of 2020. On the other hand, there were a total of 22 hedge funds with a bullish position in LECO a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Lincoln Electric Holdings, Inc. (NASDAQ:LECO) was held by Fisher Asset Management, which reported holding $92.8 million worth of stock at the end of June. It was followed by Royce & Associates with a $89.6 million position. Other investors bullish on the company included Arrowstreet Capital, Balyasny Asset Management, and GAMCO Investors. In terms of the portfolio weights assigned to each position Royce & Associates allocated the biggest weight to Lincoln Electric Holdings, Inc. (NASDAQ:LECO), around 0.62% of its 13F portfolio. Skylands Capital is also relatively very bullish on the stock, designating 0.35 percent of its 13F equity portfolio to LECO.
As aggregate interest increased, some big names have been driving this bullishness. Balyasny Asset Management, managed by Dmitry Balyasny, created the biggest position in Lincoln Electric Holdings, Inc. (NASDAQ:LECO). Balyasny Asset Management had $25.2 million invested in the company at the end of the quarter. Renaissance Technologies also made a $2.3 million investment in the stock during the quarter. The other funds with brand new LECO positions are Ray Dalio’s Bridgewater Associates and D. E. Shaw’s D E Shaw.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Lincoln Electric Holdings, Inc. (NASDAQ:LECO) but similarly valued. We will take a look at New Fortress Energy LLC (NASDAQ:NFE), Woodward Inc (NASDAQ:WWD), Globus Medical Inc (NYSE:GMED), Encompass Health Corporation (NYSE:EHC), Brunswick Corporation (NYSE:BC), AngloGold Ashanti Limited (NYSE:AU), and Reinsurance Group of America Inc (NYSE:RGA). All of these stocks’ market caps resemble LECO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NFE | 9 | 14364 | -3 |
| WWD | 22 | 682513 | -5 |
| GMED | 35 | 309393 | 7 |
| EHC | 42 | 864585 | 6 |
| BC | 38 | 1095771 | -4 |
| AU | 12 | 372898 | -2 |
| RGA | 28 | 414971 | 1 |
| Average | 26.6 | 536356 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.6 hedge funds with bullish positions and the average amount invested in these stocks was $536 million. That figure was $294 million in LECO’s case. Encompass Health Corporation (NYSE:EHC) is the most popular stock in this table. On the other hand New Fortress Energy LLC (NASDAQ:NFE) is the least popular one with only 9 bullish hedge fund positions. Lincoln Electric Holdings, Inc. (NASDAQ:LECO) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for LECO 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. 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% in 2021 through October 22nd and still beat the market by 1.6 percentage points. A small number of hedge funds were also right about betting on LECO as the stock returned 10.1% since the end of the second quarter (through 10/22) and outperformed the market by an even larger margin.
Follow Lincoln Electric Holdings Inc (NASDAQ:LECO)
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Disclosure: None. This article was originally published at Insider Monkey.
