Is SiteOne Landscape Supply, Inc. (SITE) Going to Burn These Hedge Funds?

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 873 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their June 30th holdings, data that is available nowhere else. Should you consider SiteOne Landscape Supply, Inc. (NYSE:SITE) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.

Is SiteOne Landscape Supply, Inc. (NYSE:SITE) a bargain? The smart money was betting on the stock. The number of bullish hedge fund bets advanced by 9 recently. SiteOne Landscape Supply, Inc. (NYSE:SITE) was in 25 hedge funds’ portfolios at the end of June. The all time high for this statistic is 28. Our calculations also showed that SITE isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 16 hedge funds in our database with SITE holdings at the end of March.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Clint Carlson of Carlson Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. 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 homepage. Keeping this in mind let’s take a look at the recent hedge fund action surrounding SiteOne Landscape Supply, Inc. (NYSE:SITE).

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

At the end of June, a total of 25 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 56% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in SITE over the last 24 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Millennium Management, managed by Israel Englander, holds the most valuable position in SiteOne Landscape Supply, Inc. (NYSE:SITE). Millennium Management has a $103.1 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by D. E. Shaw of D E Shaw, with a $36.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining professional money managers that are bullish comprise Dmitry Balyasny’s Balyasny Asset Management, Ken Griffin’s Citadel Investment Group and Renaissance Technologies. In terms of the portfolio weights assigned to each position Thames Capital Management allocated the biggest weight to SiteOne Landscape Supply, Inc. (NYSE:SITE), around 0.38% of its 13F portfolio. Carlson Capital is also relatively very bullish on the stock, designating 0.31 percent of its 13F equity portfolio to SITE.

Now, some big names were leading the bulls’ herd. Millennium Management, managed by Israel Englander, established the most valuable position in SiteOne Landscape Supply, Inc. (NYSE:SITE). Millennium Management had $103.1 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also made a $23.1 million investment in the stock during the quarter. The following funds were also among the new SITE investors: Renaissance Technologies, Clint Carlson’s Carlson Capital, and Anand Parekh’s Alyeska Investment Group.

Let’s also examine hedge fund activity in other stocks similar to SiteOne Landscape Supply, Inc. (NYSE:SITE). These stocks are Starwood Property Trust, Inc. (NYSE:STWD), Alaska Air Group, Inc. (NYSE:ALK), FirstService Corporation (NASDAQ:FSV), Royal Gold, Inc (NASDAQ:RGLD), Luminar Technologies, Inc. (NASDAQ:LAZR), Voya Financial Inc (NYSE:VOYA), and Cimarex Energy Co (NYSE:XEC). This group of stocks’ market caps resemble SITE’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
STWD 11 169076 1
ALK 38 505897 6
FSV 13 250969 -4
RGLD 20 241288 3
LAZR 21 193173 9
VOYA 44 983651 2
XEC 36 1134161 -3
Average 26.1 496888 2

View table here if you experience formatting issues.

As you can see these stocks had an average of 26.1 hedge funds with bullish positions and the average amount invested in these stocks was $497 million. That figure was $234 million in SITE’s case. Voya Financial Inc (NYSE:VOYA) is the most popular stock in this table. On the other hand Starwood Property Trust, Inc. (NYSE:STWD) is the least popular one with only 11 bullish hedge fund positions. SiteOne Landscape Supply, Inc. (NYSE:SITE) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SITE is 58. 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. A small number of hedge funds were also right about betting on SITE as the stock returned 32.5% since the end of the second quarter (through 10/22) and outperformed the market by an even larger margin.

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