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. We have processed the filings of the more than 817 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider Linde plc (NYSE:LIN) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is LIN a good stock to buy now? The smart money was taking a bullish view. The number of bullish hedge fund bets advanced by 8 in recent months. Linde plc (NYSE:LIN) was in 60 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 53. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that LIN isn’t among the 30 most popular stocks among hedge funds (click for Q3 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.
In the 21st century investor’s toolkit there are several metrics investors use to grade their holdings. A couple of the best metrics are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the best picks of the best fund managers can outpace their index-focused peers by a solid margin (see the details here).
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 5 best cheap stocks to buy according to Ray Dalio to identify stocks with 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. Now we’re going to view the new hedge fund action surrounding Linde plc (NYSE:LIN).
What have hedge funds been doing with Linde plc (NYSE:LIN)?
At the end of September, a total of 60 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 15% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in LIN over the last 21 quarters. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
Among these funds, Ako Capital held the most valuable stake in Linde plc (NYSE:LIN), which was worth $879.4 million at the end of the third quarter. On the second spot was Egerton Capital Limited which amassed $500.6 million worth of shares. Impax Asset Management, Diamond Hill Capital, and Millennium Management 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 Ako Capital allocated the biggest weight to Linde plc (NYSE:LIN), around 13.8% of its 13F portfolio. Polaris Capital Management is also relatively very bullish on the stock, earmarking 7.03 percent of its 13F equity portfolio to LIN.
As industrywide interest jumped, some big names were breaking ground themselves. Point72 Asset Management, managed by Steve Cohen, created the largest position in Linde plc (NYSE:LIN). Point72 Asset Management had $23 million invested in the company at the end of the quarter. Guy Shahar’s DSAM Partners also made a $19.5 million investment in the stock during the quarter. The other funds with brand new LIN positions are Dmitry Balyasny’s Balyasny Asset Management, Vince Maddi and Shawn Brennan’s SIR Capital Management, and Paul Tudor Jones’s Tudor Investment Corp.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Linde plc (NYSE:LIN) but similarly valued. These stocks are Shopify Inc (NYSE:SHOP), Royal Dutch Shell plc (NYSE:RDS), Philip Morris International Inc. (NYSE:PM), Honeywell International Inc. (NYSE:HON), International Business Machines Corp. (NYSE:IBM), BHP Group (NYSE:BBL), and American Tower Corporation (REIT) (NYSE:AMT). This group of stocks’ market values are similar to LIN’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 45.9 hedge funds with bullish positions and the average amount invested in these stocks was $2580 million. That figure was $3555 million in LIN’s case. Shopify Inc (NYSE:SHOP) is the most popular stock in this table. On the other hand BHP Group (NYSE:BBL) is the least popular one with only 16 bullish hedge fund positions. Linde plc (NYSE:LIN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for LIN is 73.8. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 31.6% in 2020 through December 2nd and beat the market again by 16 percentage points. Unfortunately LIN wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on LIN were disappointed as the stock returned 5.8% since the end of September (through 12/2) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.