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These Hedge Funds Are Dumping W.W. Grainger, Inc. (GWW)

The Insider Monkey team has completed processing the quarterly 13F filings for the June quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards W.W. Grainger, Inc. (NYSE:GWW).

Is W.W. Grainger, Inc. (NYSE:GWW) going to take off soon? The smart money is turning less bullish. The number of bullish hedge fund positions decreased by 8 lately. Our calculations also showed that GWW isn’t among the 30 most popular stocks among hedge funds.

According to most market participants, hedge funds are perceived as slow, outdated investment tools of yesteryear. While there are more than 8000 funds in operation today, We look at the masters of this club, around 750 funds. Most estimates calculate that this group of people control the lion’s share of all hedge funds’ total capital, and by paying attention to their first-class investments, Insider Monkey has uncovered several investment strategies that have historically beaten the S&P 500 index. Insider Monkey’s flagship hedge fund strategy outpaced the S&P 500 index by around 5 percentage points annually since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .

CITADEL INVESTMENT GROUP

Unlike this former hedge fund manager who is convinced Dow will soar past 40000, 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. Let’s view the fresh hedge fund action encompassing W.W. Grainger, Inc. (NYSE:GWW).

How have hedgies been trading W.W. Grainger, Inc. (NYSE:GWW)?

Heading into the third quarter of 2019, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -28% from one quarter earlier. On the other hand, there were a total of 23 hedge funds with a bullish position in GWW a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds with GWW Positions

Among these funds, D E Shaw held the most valuable stake in W.W. Grainger, Inc. (NYSE:GWW), which was worth $74.3 million at the end of the second quarter. On the second spot was AQR Capital Management which amassed $61.6 million worth of shares. Moreover, Two Sigma Advisors, Citadel Investment Group, and D E Shaw were also bullish on W.W. Grainger, Inc. (NYSE:GWW), allocating a large percentage of their portfolios to this stock.

Since W.W. Grainger, Inc. (NYSE:GWW) has witnessed bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there was a specific group of funds that elected to cut their entire stakes in the second quarter. It’s worth mentioning that Clint Carlson’s Carlson Capital dropped the largest investment of all the hedgies followed by Insider Monkey, comprising about $6.8 million in stock, and Gregg Moskowitz’s Interval Partners was right behind this move, as the fund said goodbye to about $5.3 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 8 funds in the second quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as W.W. Grainger, Inc. (NYSE:GWW) but similarly valued. These stocks are Magellan Midstream Partners, L.P. (NYSE:MMP), Pinterest, Inc. (NYSE:PINS), SS&C Technologies Holdings, Inc. (NASDAQ:SSNC), and CenterPoint Energy, Inc. (NYSE:CNP). This group of stocks’ market caps resemble GWW’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MMP 10 62495 0
PINS 31 402373 31
SSNC 41 1596822 4
CNP 29 1051355 -5
Average 27.75 778261 7.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 27.75 hedge funds with bullish positions and the average amount invested in these stocks was $778 million. That figure was $285 million in GWW’s case. SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) is the most popular stock in this table. On the other hand Magellan Midstream Partners, L.P. (NYSE:MMP) is the least popular one with only 10 bullish hedge fund positions. W.W. Grainger, Inc. (NYSE:GWW) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks (see the video below) among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. A small number of hedge funds were also right about betting on GWW as the stock returned 11.4% during the same time frame and outperformed the market by an even larger margin.
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

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

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