In this article we will take a look at whether hedge funds think Macy’s, Inc. (NYSE:M) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Macy’s, Inc. (NYSE:M) investors should be aware of an increase in hedge fund interest in recent months. Macy’s, Inc. (NYSE:M) was in 41 hedge funds’ portfolios at the end of September. The all time high for this statistic is 67. Our calculations also showed that M isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
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 we’re going to take a peek at the new hedge fund action surrounding Macy’s, Inc. (NYSE:M).
Do Hedge Funds Think M Is A Good Stock To Buy Now?
At third quarter’s end, a total of 41 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from the second quarter of 2021. On the other hand, there were a total of 28 hedge funds with a bullish position in M a year ago. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
More specifically, Arrowstreet Capital was the largest shareholder of Macy’s, Inc. (NYSE:M), with a stake worth $238.9 million reported as of the end of September. Trailing Arrowstreet Capital was D E Shaw, which amassed a stake valued at $187.2 million. Appaloosa Management LP, Contrarius Investment Management, and Two Sigma Advisors 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 JANA Partners allocated the biggest weight to Macy’s, Inc. (NYSE:M), around 8.36% of its 13F portfolio. Contrarius Investment Management is also relatively very bullish on the stock, designating 7.37 percent of its 13F equity portfolio to M.
With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. JANA Partners, managed by Barry Rosenstein, assembled the most outsized position in Macy’s, Inc. (NYSE:M). JANA Partners had $104.5 million invested in the company at the end of the quarter. Steven Tananbaum’s GoldenTree Asset Management also made a $36.8 million investment in the stock during the quarter. The other funds with brand new M positions are Kamyar Khajavi’s MIK Capital, Brian Scudieri’s Kehrs Ridge Capital, and Alexander Mitchell’s Scopus Asset Management.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Macy’s, Inc. (NYSE:M) but similarly valued. We will take a look at Casey’s General Stores, Inc. (NASDAQ:CASY), Voya Financial Inc (NYSE:VOYA), Woori Financial Group Inc. (NYSE:WF), Chart Industries, Inc. (NASDAQ:GTLS), BlackLine, Inc. (NASDAQ:BL), Nielsen Holdings plc (NYSE:NLSN), and Descartes Systems Group (NASDAQ:DSGX). This group of stocks’ market values match M’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CASY | 22 | 211044 | -2 |
| VOYA | 35 | 968117 | -9 |
| WF | 2 | 3608 | 0 |
| GTLS | 22 | 350268 | -5 |
| BL | 18 | 326955 | -2 |
| NLSN | 24 | 1476397 | -4 |
| DSGX | 14 | 379447 | -1 |
| Average | 19.6 | 530834 | -3.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.6 hedge funds with bullish positions and the average amount invested in these stocks was $531 million. That figure was $1479 million in M’s case. Voya Financial Inc (NYSE:VOYA) 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 2 bullish hedge fund positions. Compared to these stocks Macy’s, Inc. (NYSE:M) is more popular among hedge funds. Our overall hedge fund sentiment score for M is 78.4. 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 returned 28.6% in 2021 through November 30th but still managed to beat the market by 5.6 percentage points. Hedge funds were also right about betting on M as the stock returned 26.1% since the end of September (through 11/30) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Follow Macy's Inc. (NYSE:M)
Follow Macy's Inc. (NYSE:M)
Suggested Articles:
- 10 Best 3D Printing and Additive Manufacturing Stocks to Buy
- Maplelane’s Top 10 Stock Holdings
- 10 Biggest Companies Competing With Netflix
Disclosure: None. This article was originally published at Insider Monkey.
