Is GRA Stock A Buy or Sell?

Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards W.R. Grace & Co. (NYSE:GRA) changed recently.

Is GRA stock a buy or sell? Hedge funds were in a bullish mood. The number of long hedge fund positions inched up by 1 lately. W.R. Grace & Co. (NYSE:GRA) was in 40 hedge funds’ portfolios at the end of December. The all time high for this statistic is 47. Our calculations also showed that GRA isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings). There were 39 hedge funds in our database with GRA holdings at the end of September.

In the 21st century investor’s toolkit there are a large number of metrics stock market investors use to size up stocks. A pair of the less utilized metrics are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the best picks of the best money managers can beat their index-focused peers by a very impressive amount (see the details here).

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 10 best battery stocks to buy 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 let’s go over the latest hedge fund action surrounding W.R. Grace & Co. (NYSE:GRA).

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

At Q4’s end, a total of 40 of the hedge funds tracked by Insider Monkey were long this stock, a change of 3% from the previous quarter. The graph below displays the number of hedge funds with bullish position in GRA over the last 22 quarters. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).

The largest stake in W.R. Grace & Co. (NYSE:GRA) was held by 40 North Management, which reported holding $540.8 million worth of stock at the end of December. It was followed by Soroban Capital Partners with a $149.7 million position. Other investors bullish on the company included Lyrical Asset Management, Diamond Hill Capital, and Cantillon Capital Management. In terms of the portfolio weights assigned to each position Atlantic Investment Management allocated the biggest weight to W.R. Grace & Co. (NYSE:GRA), around 18.95% of its 13F portfolio. 40 North Management is also relatively very bullish on the stock, earmarking 16.3 percent of its 13F equity portfolio to GRA.

Now, key hedge funds have jumped into W.R. Grace & Co. (NYSE:GRA) headfirst. JANA Partners, managed by Barry Rosenstein, created the largest position in W.R. Grace & Co. (NYSE:GRA). JANA Partners had $16.8 million invested in the company at the end of the quarter. Michael Price’s MFP Investors also made a $11 million investment in the stock during the quarter. The other funds with new positions in the stock are Joseph Samuels’s Islet Management, Isaac Corre’s Governors Lane, and Phill Gross and Robert Atchinson’s Adage Capital Management.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as W.R. Grace & Co. (NYSE:GRA) but similarly valued. We will take a look at John Bean Technologies Corporation (NYSE:JBT), BMC Stock Holdings, Inc. (NASDAQ:BMCH), Celsius Holdings, Inc. (NASDAQ:CELH), WNS (Holdings) Limited (NYSE:WNS), FuelCell Energy, Inc. (NASDAQ:FCEL), MicroStrategy Incorporated (NASDAQ:MSTR), and Jumia Technologies AG (NYSE:JMIA). This group of stocks’ market values are closest to GRA’s market value.

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As you can see these stocks had an average of 18.3 hedge funds with bullish positions and the average amount invested in these stocks was $266 million. That figure was $1259 million in GRA’s case. BMC Stock Holdings, Inc. (NASDAQ:BMCH) is the most popular stock in this table. On the other hand John Bean Technologies Corporation (NYSE:JBT) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks W.R. Grace & Co. (NYSE:GRA) is more popular among hedge funds. Our overall hedge fund sentiment score for GRA is 81.5. 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 returned 5.3% in 2021 through March 19th but still managed to beat the market by 0.8 percentage points. Hedge funds were also right about betting on GRA as the stock returned 7.8% since the end of December (through 3/19) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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