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 funds have been producing disappointing net returns in recent years, however that was partly due to the poor performance of small-cap stocks in general. Well, small-cap stocks finally turned the corner and have been beating the large-cap stocks by more than 10 percentage points over the last 5 months.This means the relevancy of hedge funds’ public filings became inarguable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Praxair, Inc. (NYSE:PX).
Is Praxair, Inc. (NYSE:PX) a healthy stock for your portfolio? Hedge funds are selling. The number of bullish hedge fund positions retreated by 1 recently. PX was in 34 hedge funds’ portfolios at the end of the third quarter of 2016. There were 35 hedge funds in our database with PX positions at the end of the previous quarter. At the end of this article we will also compare PX to other stocks including Barclays PLC (ADR) (NYSE:BCS), TransCanada Corporation (USA) (NYSE:TRP), and LyondellBasell Industries NV (NYSE:LYB) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
With all of this in mind, we’re going to take a peek at the fresh action encompassing Praxair, Inc. (NYSE:PX).
How have hedgies been trading Praxair, Inc. (NYSE:PX)?
Heading into the fourth quarter of 2016, a total of 34 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -3% from one quarter earlier. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Ric Dillon’s Diamond Hill Capital has the biggest position in Praxair, Inc. (NYSE:PX), worth close to $112.5 million, corresponding to 0.7% of its total 13F portfolio. Sitting at the No. 2 spot is John Armitage of Egerton Capital Limited, with a $96.7 million position; the fund has 1.1% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish contain Phill Gross and Robert Atchinson’s Adage Capital Management, Stephen J. Errico’s Locust Wood Capital Advisers and Noam Gottesman’s GLG Partners.
Due to the fact that Praxair, Inc. (NYSE:PX) has witnessed falling interest from hedge fund managers, it’s easy to see that there was a specific group of fund managers that slashed their full holdings by the end of the third quarter. At the top of the heap, Jean-Marie Eveillard’s First Eagle Investment Management said goodbye to the biggest stake of all the hedgies monitored by Insider Monkey, comprising close to $193.2 million in stock, and Dmitry Balyasny’s Balyasny Asset Management was right behind this move, as the fund dumped about $17.9 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 1 funds by the end of the third quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Praxair, Inc. (NYSE:PX) but similarly valued. We will take a look at Barclays PLC (ADR) (NYSE:BCS), TransCanada Corporation (USA) (NYSE:TRP), LyondellBasell Industries NV (NYSE:LYB), and Boston Scientific Corporation (NYSE:BSX). This group of stocks’ market valuations are closest to PX’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 31.25 hedge funds with bullish positions and the average amount invested in these stocks was $1.18 billion. That figure was $536 million in PX’s case. LyondellBasell Industries NV (NYSE:LYB) is the most popular stock in this table. On the other hand Barclays PLC (ADR) (NYSE:BCS) is the least popular one with only 14 bullish hedge fund positions. Praxair, Inc. (NYSE:PX) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard LYB might be a better candidate to consider a long position.