Insider Monkey finished processing more than 738 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2019. In this article we are going to take a look at smart money sentiment towards Worthington Industries, Inc. (NYSE:WOR).
Is Worthington Industries, Inc. (NYSE:WOR) worth your attention right now? Investors who are in the know are getting more bullish. The number of bullish hedge fund positions rose by 6 lately. Our calculations also showed that wor isn’t among the 30 most popular stocks among hedge funds.
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 market by 40 percentage points since May 2014 through May 30, 2019 (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.
Let’s take a gander at the new hedge fund action surrounding Worthington Industries, Inc. (NYSE:WOR).
What have hedge funds been doing with Worthington Industries, Inc. (NYSE:WOR)?
Heading into the second quarter of 2019, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of 55% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards WOR over the last 15 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Royce & Associates was the largest shareholder of Worthington Industries, Inc. (NYSE:WOR), with a stake worth $18.2 million reported as of the end of March. Trailing Royce & Associates was Winton Capital Management, which amassed a stake valued at $17.1 million. Fisher Asset Management, AQR Capital Management, and GLG Partners were also very fond of the stock, giving the stock large weights in their portfolios.
Consequently, specific money managers were leading the bulls’ herd. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, created the most valuable position in Worthington Industries, Inc. (NYSE:WOR). Arrowstreet Capital had $3 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also made a $1.1 million investment in the stock during the quarter. The other funds with new positions in the stock are Israel Englander’s Millennium Management, Bruce Kovner’s Caxton Associates LP, and Benjamin A. Smith’s Laurion Capital Management.
Let’s check out hedge fund activity in other stocks similar to Worthington Industries, Inc. (NYSE:WOR). These stocks are MyoKardia, Inc. (NASDAQ:MYOK), Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD), Jack in the Box Inc. (NASDAQ:JACK), and Inogen Inc (NASDAQ:INGN). All of these stocks’ market caps match WOR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MYOK | 34 | 783722 | 12 |
| IRWD | 23 | 421368 | 6 |
| JACK | 36 | 645430 | 7 |
| INGN | 17 | 136102 | -8 |
| Average | 27.5 | 496656 | 4.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.5 hedge funds with bullish positions and the average amount invested in these stocks was $497 million. That figure was $59 million in WOR’s case. Jack in the Box Inc. (NASDAQ:JACK) is the most popular stock in this table. On the other hand Inogen Inc (NASDAQ:INGN) is the least popular one with only 17 bullish hedge fund positions. Compared to these stocks Worthington Industries, Inc. (NYSE:WOR) is even less popular than INGN. Hedge funds dodged a bullet by taking a bearish stance towards WOR. Our calculations showed that the top 20 most popular hedge fund stocks returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately WOR wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); WOR investors were disappointed as the stock returned 1.7% during the same time frame and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in the second quarter.
Disclosure: None. This article was originally published at Insider Monkey.
