In this article we will take a look at whether hedge funds think Floor & Decor Holdings, Inc. (NYSE:FND) 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.
Is FNF stock a buy? Hedge funds were in a pessimistic mood. The number of bullish hedge fund positions fell by 11 in recent months. Floor & Decor Holdings, Inc. (NYSE:FND) was in 31 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 44. Our calculations also showed that FND isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we heard that billionaire Peter Thiel is backing this biotech stock. So, we are taking a closer look at this space. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. 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 website. Keeping this in mind we’re going to take a look at the key hedge fund action regarding Floor & Decor Holdings, Inc. (NYSE:FND).
Do Hedge Funds Think FND Is A Good Stock To Buy Now?
Heading into the first quarter of 2021, a total of 31 of the hedge funds tracked by Insider Monkey were long this stock, a change of -26% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards FND over the last 22 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.
According to Insider Monkey’s hedge fund database, Colin Moran’s Abdiel Capital Advisors has the biggest position in Floor & Decor Holdings, Inc. (NYSE:FND), worth close to $462.8 million, corresponding to 13.1% of its total 13F portfolio. Sitting at the No. 2 spot is Two Creeks Capital Management, managed by Ryan Pedlow, which holds a $181.7 million position; 9.9% of its 13F portfolio is allocated to the company. Remaining members of the smart money with similar optimism encompass Lee Hicks and Jan Koerner’s Park Presidio Capital, Amir Mokari’s Emerson Point Capital and Principal Global Investors’s Columbus Circle Investors. In terms of the portfolio weights assigned to each position Abdiel Capital Advisors allocated the biggest weight to Floor & Decor Holdings, Inc. (NYSE:FND), around 13.07% of its 13F portfolio. Two Creeks Capital Management is also relatively very bullish on the stock, dishing out 9.92 percent of its 13F equity portfolio to FND.
Since Floor & Decor Holdings, Inc. (NYSE:FND) has faced falling interest from the aggregate hedge fund industry, we can see that there is a sect of money managers that slashed their positions entirely last quarter. It’s worth mentioning that Joel Ramin’s 12 West Capital Management dumped the largest investment of the “upper crust” of funds followed by Insider Monkey, worth close to $33.7 million in stock. Steve Cohen’s fund, Point72 Asset Management, also dropped its stock, about $18.8 million worth. These transactions are interesting, as total hedge fund interest fell by 11 funds last quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Floor & Decor Holdings, Inc. (NYSE:FND) but similarly valued. We will take a look at Teck Resources Ltd (NYSE:TECK), BanColombia S.A. (NYSE:CIB), American Airlines Group Inc (NASDAQ:AAL), Amedisys Inc (NASDAQ:AMED), Vistra Corp. (NYSE:VST), Lear Corporation (NYSE:LEA), and Henry Schein, Inc. (NASDAQ:HSIC). This group of stocks’ market values are closest to FND’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.6 hedge funds with bullish positions and the average amount invested in these stocks was $760 million. That figure was $1027 million in FND’s case. Vistra Corp. (NYSE:VST) is the most popular stock in this table. On the other hand BanColombia S.A. (NYSE:CIB) is the least popular one with only 4 bullish hedge fund positions. Floor & Decor Holdings, Inc. (NYSE:FND) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FND is 53.7. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.2% in 2021 through April 12th and still beat the market by 1.5 percentage points. Hedge funds were also right about betting on FND as the stock returned 21.5% since the end of Q4 (through 4/12) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.