Is FMC Corporation (FMC) Going to Burn These Hedge Funds?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. What do these smart investors think about FMC Corporation (NYSE:FMC)?

FMC Corporation (NYSE:FMC) investors should be aware of an increase in activity from the world’s largest hedge funds lately. FMC was in 39 hedge funds’ portfolios at the end of March. There were 35 hedge funds in our database with FMC holdings at the end of the previous quarter. Our calculations also showed that FMC isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

To most shareholders, hedge funds are viewed as unimportant, old financial vehicles of years past. While there are greater than 8000 funds trading at present, Our researchers look at the elite of this group, around 850 funds. Most estimates calculate that this group of people manage the majority of the hedge fund industry’s total capital, and by observing their finest picks, Insider Monkey has identified various investment strategies that have historically defeated the broader indices. Insider Monkey’s flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .


Lee Ainslie of Maverick Capital

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to check out the key hedge fund action regarding FMC Corporation (NYSE:FMC).

What does smart money think about FMC Corporation (NYSE:FMC)?

At Q1’s end, a total of 39 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from the fourth quarter of 2019. By comparison, 29 hedge funds held shares or bullish call options in FMC a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in FMC Corporation (NYSE:FMC) was held by Glenview Capital, which reported holding $158.7 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $81.5 million position. Other investors bullish on the company included Pelham Capital, Cardinal Capital, and Millennium Management. In terms of the portfolio weights assigned to each position Pelham Capital allocated the biggest weight to FMC Corporation (NYSE:FMC), around 10.53% of its 13F portfolio. Albar Capital is also relatively very bullish on the stock, setting aside 8.54 percent of its 13F equity portfolio to FMC.

As industrywide interest jumped, key money managers have been driving this bullishness. Pelham Capital, managed by Ross Turner, assembled the largest position in FMC Corporation (NYSE:FMC). Pelham Capital had $72.8 million invested in the company at the end of the quarter. Jos Shaver’s Electron Capital Partners also made a $10.9 million investment in the stock during the quarter. The following funds were also among the new FMC investors: Steve Cohen’s Point72 Asset Management, Jonathan Barrett and Paul Segal’s Luminus Management, and Lee Ainslie’s Maverick Capital.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as FMC Corporation (NYSE:FMC) but similarly valued. These stocks are Fifth Third Bancorp (NASDAQ:FITB), Brookfield Infrastructure Partners L.P. (NYSE:BIP), Jacobs Engineering Group Inc. (NYSE:J), and KB Financial Group, Inc. (NYSE:KB). This group of stocks’ market values resemble FMC’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
FITB 30 384097 -11
BIP 14 55630 3
J 28 995596 -7
KB 7 37837 2
Average 19.75 368290 -3.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 19.75 hedge funds with bullish positions and the average amount invested in these stocks was $368 million. That figure was $560 million in FMC’s case. Fifth Third Bancorp (NASDAQ:FITB) is the most popular stock in this table. On the other hand KB Financial Group, Inc. (NYSE:KB) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks FMC Corporation (NYSE:FMC) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May but still managed to beat the market by 13.2 percentage points. Hedge funds were also right about betting on FMC, though not to the same extent, as the stock returned 20.5% in Q2 (through the end of May) and outperformed the market as well.

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