Were Expert Investors Right About Linde plc (LIN)?

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 at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. Hedge funds’ consensus stock picks performed spectacularly over the last 3 years, but 2022 hasn’t been kind to hedge funds. In this article we look at how hedge funds traded Linde plc (NYSE:LIN) and determine whether the smart money was really smart about this stock.

Is Linde plc (NYSE:LIN) a sound investment now? The smart money was becoming less confident. The number of long hedge fund positions decreased by 9 lately. Linde plc (NYSE:LIN) was in 46 hedge funds’ portfolios at the end of September. The all time high for this statistic is 60. Our calculations also showed that LIN isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 55 hedge funds in our database with LIN holdings at the end of June.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. Keeping this in mind let’s check out the recent hedge fund action surrounding Linde plc (NYSE:LIN).

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

At the end of September, a total of 46 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -16% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards LIN over the last 25 quarters. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).

Among these funds, Ako Capital held the most valuable stake in Linde plc (NYSE:LIN), which was worth $1123 million at the end of the third quarter. On the second spot was Egerton Capital Limited which amassed $1052.1 million worth of shares. Impax Asset Management, Holocene Advisors, and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Ako Capital allocated the biggest weight to Linde plc (NYSE:LIN), around 11.64% of its 13F portfolio. Albar Capital is also relatively very bullish on the stock, setting aside 7.98 percent of its 13F equity portfolio to LIN.

Judging by the fact that Linde plc (NYSE:LIN) has experienced a decline in interest from hedge fund managers, logic holds that there were a few funds that decided to sell off their entire stakes heading into Q4. At the top of the heap, Matthew Stadelman’s Diamond Hill Capital dumped the biggest stake of the 750 funds monitored by Insider Monkey, comprising an estimated $300.9 million in stock, and Renaissance Technologies was right behind this move, as the fund dropped about $145.7 million worth. These moves are important to note, as total hedge fund interest fell by 9 funds heading into Q4.

Let’s now take a look at hedge fund activity in other stocks similar to Linde plc (NYSE:LIN). We will take a look at Charter Communications, Inc. (NASDAQ:CHTR), Philip Morris International Inc. (NYSE:PM), Intuit Inc. (NASDAQ:INTU), Honeywell International Inc. (NYSE:HON), QUALCOMM, Incorporated (NASDAQ:QCOM), Citigroup Inc. (NYSE:C), and Royal Bank of Canada (NYSE:RY). This group of stocks’ market caps are closest to LIN’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 56.6 hedge funds with bullish positions and the average amount invested in these stocks was $6001 million. That figure was $4769 million in LIN’s case. Citigroup Inc. (NYSE:C) is the most popular stock in this table. On the other hand Royal Bank of Canada (NYSE:RY) is the least popular one with only 16 bullish hedge fund positions. Linde plc (NYSE:LIN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for LIN is 42.8. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. A small number of hedge funds were also right about betting on LIN as the stock returned 9% since the end of the third quarter (through 1/31) and outperformed the market by an even larger margin.

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