Should You Buy Iron Mountain Incorporated (IRM)?

We at Insider Monkey have gone over 700 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30. In this article we look at what those investors think of Iron Mountain Inc (NYSE:IRM) .

Hedge fund interest in Iron Mountain Inc (NYSE:IRM) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as CNH Industrial NV (NYSE:CNHI), Arch Capital Group Ltd. (NASDAQ:ACGL), and The WhiteWave Foods Co (NYSE:WWAV) to gather more data points.

We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.

With all of this in mind, we’re going to check out the fresh action regarding Iron Mountain Incorporated (NYSE:IRM).

How have hedgies been trading Iron Mountain Incorporated (NYSE:IRM)?

Heading into the fourth quarter of 2016, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, unchanged from the previous quarter. The graph below displays the number of hedge funds with bullish position in IRM over the last 5 quarters. So, let’s review 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, Thomas Bancroft’s Makaira Partners has the number one position in Iron Mountain Incorporated (NYSE:IRM), worth close to $62.8 million, amounting to 9.5% of its total 13F portfolio. Coming in second is Phill Gross and Robert Atchinson of Adage Capital Management, with a $13.4 million position; less than 0.1% of its 13F portfolio is allocated to the stock. Some other members of the smart money that are bullish consist of David Harding’s Winton Capital Management, D. E. Shaw’s D E Shaw and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. We should note that Makaira Partners is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

We already know that not all hedge funds are bullish on the stock and some hedge funds actually dropped their positions entirely. Intriguingly, Ken Griffin’s Citadel Investment Group dropped the largest stake of all the investors tracked by Insider Monkey, valued at about $1.2 million in call options. Glenn Russell Dubin’s fund, Highbridge Capital Management, also said goodbye to its stock, about $0.6 million worth of Iron Mountain Incorporated (NYSE:IRM) shares.

Let’s now review hedge fund activity in other stocks similar to Iron Mountain Incorporated (NYSE:IRM). We will take a look at CNH Industrial NV (NYSE:CNHI), Arch Capital Group Ltd. (NASDAQ:ACGL), The WhiteWave Foods Co (NYSE:WWAV), and Celanese Corporation (NYSE:CE). All of these stocks’ market caps match IRM’s market cap.

As you can see these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $963 million. That figure was $103 million in IRM’s case. The WhiteWave Foods Co (NYSE:WWAV) is the most popular stock in this table. On the other hand CNH Industrial NV (NYSE:CNHI) is the least popular one with only 15 bullish hedge fund positions. Iron Mountain Incorporated (NYSE:IRM) 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 WWAV might be a better candidate to consider taking a long position in.

Disclosure: none.