In this article we will check out the progression of hedge fund sentiment towards Masco Corporation (NYSE:MAS) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Is Masco Corporation (NYSE:MAS) a buy, sell, or hold? Investors who are in the know were reducing their bets on the stock. The number of bullish hedge fund bets retreated by 7 lately. Masco Corporation (NYSE:MAS) was in 33 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 51. Our calculations also showed that MAS isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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Do Hedge Funds Think MAS Is A Good Stock To Buy Now?
At first quarter’s end, a total of 33 of the hedge funds tracked by Insider Monkey were long this stock, a change of -18% from one quarter earlier. By comparison, 34 hedge funds held shares or bullish call options in MAS a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Ariel Investments held the most valuable stake in Masco Corporation (NYSE:MAS), which was worth $102.1 million at the end of the fourth quarter. On the second spot was Arrowstreet Capital which amassed $84.5 million worth of shares. AQR Capital Management, D E Shaw, and Renaissance Technologies 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 12th Street Asset Management allocated the biggest weight to Masco Corporation (NYSE:MAS), around 3.58% of its 13F portfolio. SAYA Management is also relatively very bullish on the stock, designating 3.24 percent of its 13F equity portfolio to MAS.
Because Masco Corporation (NYSE:MAS) has faced a decline in interest from the entirety of the hedge funds we track, we can see that there lies a certain “tier” of hedgies that elected to cut their entire stakes last quarter. Interestingly, Dmitry Balyasny’s Balyasny Asset Management dropped the biggest stake of the “upper crust” of funds tracked by Insider Monkey, worth about $35.2 million in stock, and John Smith Clark’s Southpoint Capital Advisors was right behind this move, as the fund said goodbye to about $11 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 7 funds last quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Masco Corporation (NYSE:MAS) but similarly valued. These stocks are Altice USA, Inc. (NYSE:ATUS), Guardant Health, Inc. (NASDAQ:GH), American Airlines Group Inc (NASDAQ:AAL), Teledyne Technologies Incorporated (NYSE:TDY), GoodRx Holdings, Inc. (NASDAQ:GDRX), Avery Dennison Corporation (NYSE:AVY), and Campbell Soup Company (NYSE:CPB). All of these stocks’ market caps match MAS’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 32 hedge funds with bullish positions and the average amount invested in these stocks was $1124 million. That figure was $686 million in MAS’s case. Altice USA, Inc. (NYSE:ATUS) is the most popular stock in this table. On the other hand Avery Dennison Corporation (NYSE:AVY) is the least popular one with only 20 bullish hedge fund positions. Masco Corporation (NYSE:MAS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MAS is 40.6. 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 22.8% in 2021 through July 2nd and beat the market again by 6 percentage points. Unfortunately MAS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on MAS were disappointed as the stock returned -1.6% since the end of March (through 7/2) 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.