Hedge funds are not perfect. They have their bad picks just like everyone else. Micron, a stock hedge funds have loved, lost 50% during the last 12 months ending in October 30. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 30 S&P 500 stocks among hedge funds at the end of September 2014 yielded an average return of 9.5% in the same time period, vs. a gain of 5.2% for the S&P 500 Index. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of Fluor Corporation (NEW) (NYSE:FLR).
Fluor Corporation (NEW) (NYSE:FLR) was in 25 hedge funds’ portfolios at the end of the third quarter of 2015. FLR investors should pay attention to a decrease in hedge fund interest lately. There were 29 hedge funds in our database with FLR positions at the end of the previous quarter. At the end of this article we will also compare FLR to other stocks, including Pepco Holdings, Inc. (NYSE:POM), Taro Pharmaceutical Industries Ltd. (NYSE:TARO), and Alexandria Real Estate Equities Inc (NYSE:ARE) to get a better sense of its popularity.
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Keeping this in mind, we’re going to take a look at the fresh action surrounding Fluor Corporation (NEW) (NYSE:FLR).
What have hedge funds been doing with Fluor Corporation (NEW) (NYSE:FLR)?
At Q3’s end, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a decline of 14% from the second quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Gotham Asset Management, managed by Joel Greenblatt, holds the most valuable position in Fluor Corporation (NEW) (NYSE:FLR). Gotham Asset Management has a $65.2 million position in the stock, comprising 0.6% of its 13F portfolio. Sitting at the No. 2 spot is Two Sigma Advisors, managed by John Overdeck and David Siegel, which holds a $30.9 million position; 0.2% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors that hold long positions consist of Israel Englander’s Millennium Management, Joe Huber’s Huber Capital Management and Alan Fournier’s Pennant Capital Management.
Since Fluor Corporation (NEW) (NYSE:FLR) has witnessed declining sentiment from the entirety of the hedge funds we track, it’s easy to see that there lies a certain “tier” of hedgies that decided to sell off their entire stakes in the third quarter. Interestingly, Larry Foley and Paul Farrell’s Bronson Point Partners sold off the biggest stake of the 700 funds followed by Insider Monkey, worth an estimated $10.3 million in stock, and Chao Ku of Nine Chapters Capital Management was right behind this move, as the fund dropped about $7.4 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 4 funds in the third quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Fluor Corporation (NEW) (NYSE:FLR) but similarly valued. We will take a look at Pepco Holdings, Inc. (NYSE:POM), Taro Pharmaceutical Industries Ltd. (NYSE:TARO), Alexandria Real Estate Equities Inc (NYSE:ARE), and WABCO Holdings Inc. (NYSE:WBC). This group of stocks’ market values resemble FLR’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 24.75 hedge funds with bullish positions and the average amount invested in these stocks was $491 million. That figure was $214 million in FLR’s case. WABCO Holdings Inc. (NYSE:WBC) is the most popular stock in this table. On the other hand Pepco Holdings, Inc. (NYSE:POM) is the least popular one with only 21 bullish hedge fund positions. Fluor Corporation (NEW) (NYSE:FLR) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, yet we’d rather spend our time researching stocks that hedge funds are piling on. In this regard WBC might be a better candidate to consider a long position.