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Is Mettler-Toledo International Inc. (MTD) Going to Burn These Hedge Funds?

The financial regulations require hedge funds and wealthy investors that crossed the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on June 28th. We at Insider Monkey have made an extensive database of nearly 750 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Mettler-Toledo International Inc. (NYSE:MTD) based on those filings.

Mettler-Toledo International Inc. (NYSE:MTD) was in 20 hedge funds’ portfolios at the end of the second quarter of 2019. MTD investors should be aware of an increase in enthusiasm from smart money in recent months. There were 18 hedge funds in our database with MTD holdings at the end of the previous quarter. Our calculations also showed that MTD isn’t among the 30 most popular stocks among hedge funds (see the video below).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

At the moment there are a large number of gauges shareholders use to size up their stock investments. A duo of the less utilized gauges are hedge fund and insider trading moves. We have shown that, historically, those who follow the top picks of the top fund managers can outclass the market by a healthy amount (see the details here).

MTD_oct2019

Unlike some fund managers who are betting on Dow reaching 40000 in a year, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to take a glance at the fresh hedge fund action encompassing Mettler-Toledo International Inc. (NYSE:MTD).

How are hedge funds trading Mettler-Toledo International Inc. (NYSE:MTD)?

At the end of the second quarter, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 11% from the first quarter of 2019. The graph below displays the number of hedge funds with bullish position in MTD over the last 16 quarters. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).

CHILTON INVESTMENT COMPANY

When looking at the institutional investors followed by Insider Monkey, Cliff Asness’s AQR Capital Management has the biggest position in Mettler-Toledo International Inc. (NYSE:MTD), worth close to $133.7 million, accounting for 0.1% of its total 13F portfolio. Coming in second is Noam Gottesman of GLG Partners, with a $57 million position; 0.2% of its 13F portfolio is allocated to the company. Some other peers that are bullish consist of Richard Chilton’s Chilton Investment Company, Peter Muller’s PDT Partners and D. E. Shaw’s D E Shaw.

Consequently, specific money managers were breaking ground themselves. Chilton Investment Company, managed by Richard Chilton, created the most valuable position in Mettler-Toledo International Inc. (NYSE:MTD). Chilton Investment Company had $38.1 million invested in the company at the end of the quarter. Robert B. Gillam’s McKinley Capital Management also initiated a $6.2 million position during the quarter. The other funds with brand new MTD positions are Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, Michael Platt and William Reeves’s BlueCrest Capital Mgmt., and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.

Let’s now review hedge fund activity in other stocks similar to Mettler-Toledo International Inc. (NYSE:MTD). We will take a look at Imperial Oil Limited (NYSE:IMO), McCormick & Company, Incorporated (NYSE:MKC), American Water Works Company, Inc. (NYSE:AWK), and State Street Corporation (NYSE:STT). This group of stocks’ market caps resemble MTD’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
IMO 12 48343 -5
MKC 30 214802 6
AWK 23 493606 -5
STT 36 794984 4
Average 25.25 387934 0

View table here if you experience formatting issues.

As you can see these stocks had an average of 25.25 hedge funds with bullish positions and the average amount invested in these stocks was $388 million. That figure was $319 million in MTD’s case. State Street Corporation (NYSE:STT) is the most popular stock in this table. On the other hand Imperial Oil Limited (NYSE:IMO) is the least popular one with only 12 bullish hedge fund positions. Mettler-Toledo International Inc. (NYSE:MTD) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and 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 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately MTD wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); MTD investors were disappointed as the stock returned -16.1% during the third quarter 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 in 2019.

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

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