Is Lincoln Electric Holdings, Inc. (LECO) A Good Stock To Buy?

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of September 30th. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Lincoln Electric Holdings, Inc. (NASDAQ:LECO).

Is Lincoln Electric Holdings, Inc. (LECO) a good stock to buy? The smart money was taking an optimistic view. The number of bullish hedge fund positions inched up by 1 recently. Lincoln Electric Holdings, Inc. (NASDAQ:LECO) was in 21 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 26. Our calculations also showed that LECO isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 20 hedge funds in our database with LECO positions at the end of the second quarter.

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 go over the key hedge fund action encompassing Lincoln Electric Holdings, Inc. (NASDAQ:LECO).

Peter Rathjens Arrowstreet Capital 394

Peter Rathjens of Arrowstreet Capital

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

At Q3’s end, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 5% from the second quarter of 2021. By comparison, 24 hedge funds held shares or bullish call options in LECO a year ago. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

Among these funds, Royce & Associates held the most valuable stake in Lincoln Electric Holdings, Inc. (NASDAQ:LECO), which was worth $91.2 million at the end of the third quarter. On the second spot was Fisher Asset Management which amassed $88.8 million worth of shares. Arrowstreet Capital, Balyasny Asset Management, and GAMCO Investors 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 Intrinsic Edge Capital allocated the biggest weight to Lincoln Electric Holdings, Inc. (NASDAQ:LECO), around 0.81% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, dishing out 0.68 percent of its 13F equity portfolio to LECO.

Now, specific money managers have been driving this bullishness. Intrinsic Edge Capital, managed by Mark Coe, created the biggest position in Lincoln Electric Holdings, Inc. (NASDAQ:LECO). Intrinsic Edge Capital had $11.7 million invested in the company at the end of the quarter. Peter Algert’s Algert Global also made a $0.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Paul Tudor Jones’s Tudor Investment Corp, Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, and Alec Litowitz and Ross Laser’s Magnetar Capital.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Lincoln Electric Holdings, Inc. (NASDAQ:LECO) but similarly valued. We will take a look at Advanced Drainage Systems Inc. (NYSE:WMS), Brooks Automation, Inc. (NASDAQ:BRKS), Americold Realty Trust (NYSE:COLD), National Retail Properties, Inc. (NYSE:NNN), Endava plc (NYSE:DAVA), Reinsurance Group of America Inc (NYSE:RGA), and Cullen/Frost Bankers, Inc. (NYSE:CFR). All of these stocks’ market caps are similar to LECO’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
WMS 21 1092988 -5
BRKS 29 577566 -3
COLD 15 93728 -1
NNN 21 120081 2
DAVA 16 282010 0
RGA 32 452166 4
CFR 13 92869 0
Average 21 387344 -0.4

View table here if you experience formatting issues.

As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $387 million. That figure was $289 million in LECO’s case. Reinsurance Group of America Inc (NYSE:RGA) is the most popular stock in this table. On the other hand Cullen/Frost Bankers, Inc. (NYSE:CFR) is the least popular one with only 13 bullish hedge fund positions. Lincoln Electric Holdings, Inc. (NASDAQ:LECO) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for LECO is 51.3. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. A small number of hedge funds were also right about betting on LECO as the stock returned 8.7% since the end of the third quarter (through 12/31) and outperformed the market by an even larger margin.

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