Is Ingersoll Rand Inc. (IR) Going to Burn These Hedge Funds?

In this article we will take a look at whether hedge funds think Ingersoll Rand Inc. (NYSE:IR) 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.

Ingersoll Rand Inc. (NYSE:IR) has seen a decrease in support from the world’s most elite money managers recently. Ingersoll Rand Inc. (NYSE:IR) was in 31 hedge funds’ portfolios at the end of June. The all time high for this statistic is 47. Our calculations also showed that IR isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

In the financial world there are plenty of gauges shareholders can use to analyze stocks. A pair of the less utilized gauges are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the best picks of the best hedge fund managers can outperform their index-focused peers by a solid margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.

Donald Sussman Paloma Partners

Donald Sussman of Paloma Partners

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 we’re going to take a peek at the latest hedge fund action encompassing Ingersoll Rand Inc. (NYSE:IR).

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

At the end of the second quarter, a total of 31 of the hedge funds tracked by Insider Monkey were long this stock, a change of -11% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in IR over the last 24 quarters. 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, Viking Global held the most valuable stake in Ingersoll Rand Inc. (NYSE:IR), which was worth $313.2 million at the end of the second quarter. On the second spot was Holocene Advisors which amassed $114.6 million worth of shares. Adage Capital Management, Citadel Investment Group, and Greenhouse Funds 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 Greenhouse Funds allocated the biggest weight to Ingersoll Rand Inc. (NYSE:IR), around 3.3% of its 13F portfolio. Goodnow Investment Group is also relatively very bullish on the stock, setting aside 2.46 percent of its 13F equity portfolio to IR.

Judging by the fact that Ingersoll Rand Inc. (NYSE:IR) has experienced a decline in interest from the smart money, it’s easy to see that there is a sect of hedgies who sold off their positions entirely by the end of the second quarter. Intriguingly, Anand Parekh’s Alyeska Investment Group dropped the largest investment of the 750 funds followed by Insider Monkey, totaling about $5.2 million in stock, and Robert Vincent McHugh’s Jade Capital Advisors was right behind this move, as the fund sold off about $2.7 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 4 funds by the end of the second quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Ingersoll Rand Inc. (NYSE:IR) but similarly valued. We will take a look at Ameren Corporation (NYSE:AEE), Fox Corporation (NASDAQ:FOX), ZoomInfo Technologies Inc. (NASDAQ:ZI), Logitech International SA (NASDAQ:LOGI), FirstEnergy Corp. (NYSE:FE), PG&E Corporation (NYSE:PCG), and SK Telecom Co., Ltd. (NYSE:SKM). This group of stocks’ market caps are closest to IR’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
AEE 23 212535 4
FOX 25 590317 0
ZI 35 670224 11
LOGI 20 526968 5
FE 36 1704357 -15
PCG 64 4663822 -1
SKM 8 68342 0
Average 30.1 1205224 0.6

View table here if you experience formatting issues.

As you can see these stocks had an average of 30.1 hedge funds with bullish positions and the average amount invested in these stocks was $1205 million. That figure was $873 million in IR’s case. PG&E Corporation (NYSE:PCG) is the most popular stock in this table. On the other hand SK Telecom Co., Ltd. (NYSE:SKM) is the least popular one with only 8 bullish hedge fund positions. Ingersoll Rand Inc. (NYSE:IR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for IR is 41.3. 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 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 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. Hedge funds were also right about betting on IR as the stock returned 7.6% since the end of Q2 (through 10/15) 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.