Is MAS A Good Stock To Buy Now?

With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter. One of these stocks was Masco Corporation (NYSE:MAS).

Is MAS a good stock to buy now? Masco Corporation (NYSE:MAS) has experienced an increase in activity from the world’s largest hedge funds in recent months. Masco Corporation (NYSE:MAS) was in 46 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 51. There were 40 hedge funds in our database with MAS positions at the end of the second quarter. Our calculations also showed that MAS 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.

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James Dinan of York Capital Management

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 15 best blue chip stocks to buy to pick the best large-cap stocks to buy. 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. With all of this in mind let’s take a glance at the key hedge fund action encompassing Masco Corporation (NYSE:MAS).

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

At Q3’s end, a total of 46 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 15% from the second quarter of 2020. By comparison, 51 hedge funds held shares or bullish call options in MAS a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Arrowstreet Capital held the most valuable stake in Masco Corporation (NYSE:MAS), which was worth $212.2 million at the end of the third quarter. On the second spot was GLG Partners which amassed $149.1 million worth of shares. AQR Capital Management, Millennium Management, and Ariel Investments 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 SAYA Management allocated the biggest weight to Masco Corporation (NYSE:MAS), around 7.76% of its 13F portfolio. 12th Street Asset Management is also relatively very bullish on the stock, designating 2.55 percent of its 13F equity portfolio to MAS.

With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. York Capital Management, managed by James Dinan, assembled the most valuable position in Masco Corporation (NYSE:MAS). York Capital Management had $13.8 million invested in the company at the end of the quarter. Phill Gross and Robert Atchinson’s Adage Capital Management also initiated a $10.7 million position during the quarter. The following funds were also among the new MAS investors: Gregg Moskowitz’s Interval Partners, Paul Tudor Jones’s Tudor Investment Corp, and Curtis Schenker and Craig Effron’s Scoggin.

Let’s now take a look at hedge fund activity in other stocks similar to Masco Corporation (NYSE:MAS). These stocks are Livongo Health, Inc. (NASDAQ:LVGO), Pioneer Natural Resources Company (NYSE:PXD), HEICO Corporation (NYSE:HEI), Catalent Inc (NYSE:CTLT), Brookfield Infrastructure Partners L.P. (NYSE:BIP), Tiffany & Co. (NYSE:TIF), and Wix.Com Ltd (NASDAQ:WIX). This group of stocks’ market values are closest to MAS’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
LVGO 56 1497348 20
PXD 42 269938 7
HEI 43 712400 -3
CTLT 40 618061 5
BIP 13 50744 1
TIF 61 2294401 -3
WIX 36 1104994 9
Average 41.6 935412 5.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 41.6 hedge funds with bullish positions and the average amount invested in these stocks was $935 million. That figure was $879 million in MAS’s case. Tiffany & Co. (NYSE:TIF) is the most popular stock in this table. On the other hand Brookfield Infrastructure Partners L.P. (NYSE:BIP) is the least popular one with only 13 bullish hedge fund positions. Masco Corporation (NYSE:MAS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MAS is 71.4. 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 32.9% in 2020 through December 8th and beat the market again by 16.2 percentage points. Unfortunately MAS wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on MAS were disappointed as the stock returned -5.2% since the end of September (through 12/8) 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.

Follow Masco Corp (NYSE:MAS)

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