Is Corning Incorporated (GLW) Going to Burn These Hedge Funds?

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 September. 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 Corning Incorporated (NYSE:GLW), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Corning Incorporated (NYSE:GLW) investors should pay attention to a decrease in hedge fund interest recently. Corning Incorporated (NYSE:GLW) was in 32 hedge funds’ portfolios at the end of March. The all time high for this statistic is 41. There were 39 hedge funds in our database with GLW holdings at the end of December. Our calculations also showed that GLW isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

So, why do we pay attention to hedge fund sentiment before making any investment decisions? 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 more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.

Donald Yacktman of Yacktman 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. Now let’s review the latest hedge fund action surrounding Corning Incorporated (NYSE:GLW).

Do Hedge Funds Think GLW Is A Good Stock To Buy Now?

At Q1’s end, a total of 32 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -18% from the previous quarter. On the other hand, there were a total of 30 hedge funds with a bullish position in GLW a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Arrowstreet Capital held the most valuable stake in Corning Incorporated (NYSE:GLW), which was worth $143.6 million at the end of the fourth quarter. On the second spot was Holocene Advisors which amassed $115.3 million worth of shares. Citadel Investment Group, Yacktman Asset Management, and Adage Capital 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 Breakline Capital allocated the biggest weight to Corning Incorporated (NYSE:GLW), around 3.51% of its 13F portfolio. Beech Hill Partners is also relatively very bullish on the stock, dishing out 2.17 percent of its 13F equity portfolio to GLW.

Due to the fact that Corning Incorporated (NYSE:GLW) has witnessed a decline in interest from the entirety of the hedge funds we track, it’s safe to say that there is a sect of funds that elected to cut their positions entirely last quarter. It’s worth mentioning that Charles Lemonides’s Valueworks LLC dumped the largest investment of all the hedgies monitored by Insider Monkey, valued at close to $5.2 million in stock, and Michael Gelband’s ExodusPoint Capital was right behind this move, as the fund cut about $4.2 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 7 funds last quarter.

Let’s check out hedge fund activity in other stocks similar to Corning Incorporated (NYSE:GLW). We will take a look at Zimmer Biomet Holdings Inc (NYSE:ZBH), Peloton Interactive, Inc. (NASDAQ:PTON), Marvell Technology, Inc. (NASDAQ:MRVL), Orange SA (NYSE:ORAN), The Hershey Company (NYSE:HSY), Wayfair Inc (NYSE:W), and Yum! Brands, Inc. (NYSE:YUM). This group of stocks’ market caps resemble GLW’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ZBH 50 2151143 -3
PTON 64 3963327 1
MRVL 33 683159 -7
ORAN 2 10613 -1
HSY 42 1267940 3
W 37 4012752 -3
YUM 32 751481 -1
Average 37.1 1834345 -1.6

View table here if you experience formatting issues.

As you can see these stocks had an average of 37.1 hedge funds with bullish positions and the average amount invested in these stocks was $1834 million. That figure was $507 million in GLW’s case. Peloton Interactive, Inc. (NASDAQ:PTON) is the most popular stock in this table. On the other hand Orange SA (NYSE:ORAN) is the least popular one with only 2 bullish hedge fund positions. Corning Incorporated (NYSE:GLW) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for GLW is 45.6. 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 negative signal and 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 surpassed the market again by 6 percentage points. Unfortunately GLW wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); GLW investors were disappointed as the stock returned -4.8% 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 most of these stocks already outperformed the market in 2021.

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Disclosure: None. This article was originally published at Insider Monkey.