Is Lamb Weston Holdings, Inc. (LW) A Good Stock To Buy?

The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Lamb Weston Holdings, Inc. (NYSE:LW).

Is LW a good stock to buy? Lamb Weston Holdings, Inc. (NYSE:LW) was in 31 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 42. LW has experienced a decrease in hedge fund sentiment of late. There were 36 hedge funds in our database with LW holdings at the end of June. Our calculations also showed that LW isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. Keeping this in mind let’s take a peek at the new hedge fund action encompassing Lamb Weston Holdings, Inc. (NYSE:LW).

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

Heading into the fourth quarter of 2021, a total of 31 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -14% from the previous quarter. On the other hand, there were a total of 27 hedge funds with a bullish position in LW a year ago. 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 publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Hawk Ridge Management, managed by David Brown, holds the largest position in Lamb Weston Holdings, Inc. (NYSE:LW). Hawk Ridge Management has a $66.1 million position in the stock, comprising 4.2% of its 13F portfolio. The second most bullish fund manager is Millennium Management, led by Israel Englander, holding a $53.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining professional money managers that are bullish encompass Oscar Hattink’s BlueDrive Global Investors, Jack Woodruff’s Candlestick Capital Management and Noam Gottesman’s GLG Partners. In terms of the portfolio weights assigned to each position BlueDrive Global Investors allocated the biggest weight to Lamb Weston Holdings, Inc. (NYSE:LW), around 14.57% of its 13F portfolio. Hawk Ridge Management is also relatively very bullish on the stock, dishing out 4.25 percent of its 13F equity portfolio to LW.

Because Lamb Weston Holdings, Inc. (NYSE:LW) has faced bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there exists a select few hedge funds that slashed their full holdings by the end of the third quarter. Interestingly, Alexander Mitchell’s Scopus Asset Management dropped the biggest investment of the 750 funds watched by Insider Monkey, worth an estimated $40.3 million in stock, and Steve Cohen’s Point72 Asset Management was right behind this move, as the fund dropped about $34.4 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 5 funds by the end of the third quarter.

Let’s go over hedge fund activity in other stocks similar to Lamb Weston Holdings, Inc. (NYSE:LW). We will take a look at Anaplan, Inc. (NYSE:PLAN), SiteOne Landscape Supply, Inc. (NYSE:SITE), Sibanye Stillwater Limited (NYSE:SBSW), Credicorp Ltd. (NYSE:BAP), Owens Corning (NYSE:OC), Lattice Semiconductor Corporation (NASDAQ:LSCC), and Thoughtworks Holding Inc. (NASDAQ:TWKS). All of these stocks’ market caps are similar to LW’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 23.3 hedge funds with bullish positions and the average amount invested in these stocks was $617 million. That figure was $427 million in LW’s case. Anaplan, Inc. (NYSE:PLAN) is the most popular stock in this table. On the other hand Sibanye Stillwater Limited (NYSE:SBSW) is the least popular one with only 9 bullish hedge fund positions. Lamb Weston Holdings, Inc. (NYSE:LW) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for LW is 43.3. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately LW wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on LW were disappointed as the stock returned -15.1% since the end of September (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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