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Lennox International Inc. (LII) Hedge Funds Are Snapping Up

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Lennox International Inc. (NYSE:LII).

Lennox International Inc. (NYSE:LII) shareholders have witnessed an increase in hedge fund sentiment of late. LII was in 23 hedge funds’ portfolios at the end of the third quarter of 2018. There were 18 hedge funds in our database with LII holdings at the end of the previous quarter. Our calculations also showed that LII isn’t among the 30 most popular stocks among hedge funds.

To most market participants, hedge funds are viewed as worthless, old financial tools of years past. While there are greater than 8,000 funds in operation today, We look at the leaders of this club, about 700 funds. Most estimates calculate that this group of people direct bulk of the smart money’s total asset base, and by shadowing their finest investments, Insider Monkey has spotted several investment strategies that have historically outstripped the S&P 500 index. Insider Monkey’s flagship hedge fund strategy outperformed the S&P 500 index by 6 percentage points per annum since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 24% since February 2017 (through December 3rd) even though the market was up nearly 23% during the same period. We just shared a list of 11 short targets in our latest quarterly update.

MILLENNIUM MANAGEMENT

Let’s take a gander at the recent hedge fund action surrounding Lennox International Inc. (NYSE:LII).

What have hedge funds been doing with Lennox International Inc. (NYSE:LII)?

At the end of the third quarter, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 28% from the second quarter of 2018. On the other hand, there were a total of 16 hedge funds with a bullish position in LII at the beginning of this year. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

LII_dec2018

More specifically, Impax Asset Management was the largest shareholder of Lennox International Inc. (NYSE:LII), with a stake worth $58.6 million reported as of the end of September. Trailing Impax Asset Management was Millennium Management, which amassed a stake valued at $48.3 million. Brookside Capital, Scopus Asset Management, and Holocene Advisors were also very fond of the stock, giving the stock large weights in their portfolios.

Now, specific money managers were leading the bulls’ herd. Brookside Capital, managed by Bain Capital, initiated the largest position in Lennox International Inc. (NYSE:LII). Brookside Capital had $22.8 million invested in the company at the end of the quarter. Alexander Mitchell’s Scopus Asset Management also initiated a $16.4 million position during the quarter. The other funds with brand new LII positions are Brandon Haley’s Holocene Advisors, Ilya Boroditsky’s Precision Path Capital, and Nick Niell’s Arrowgrass Capital Partners.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Lennox International Inc. (NYSE:LII) but similarly valued. These stocks are The Interpublic Group of Companies Inc (NYSE:IPG), Sun Communities Inc (NYSE:SUI), East West Bancorp, Inc. (NASDAQ:EWBC), and PagSeguro Digital Ltd. (NYSE:PAGS). This group of stocks’ market caps are similar to LII’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
IPG 16 774108 0
SUI 23 556542 3
EWBC 29 443982 5
PAGS 39 1581761 -9
Average 26.75 839098 -0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 26.75 hedge funds with bullish positions and the average amount invested in these stocks was $839 million. That figure was $211 million in LII’s case. PagSeguro Digital Ltd. (NYSE:PAGS) is the most popular stock in this table. On the other hand The Interpublic Group of Companies Inc (NYSE:IPG) is the least popular one with only 16 bullish hedge fund positions. Lennox International Inc. (NYSE:LII) 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. In this regard PAGS might be a better candidate to consider a long position.

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

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