Where Do Hedge Funds Stand On Newell Brands Inc. (NWL)?

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the fourth quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Newell Brands Inc. (NASDAQ:NWL) based on that data.

Newell Brands Inc. (NASDAQ:NWL) shareholders have witnessed an increase in support from the world’s most elite money managers of late. Newell Brands Inc. (NASDAQ:NWL) was in 24 hedge funds’ portfolios at the end of March. The all time high for this statistic is 51. Our calculations also showed that NWL isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

Crispin Odey of Odey Asset Management Group

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery 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 peek at the fresh hedge fund action regarding Newell Brands Inc. (NASDAQ:NWL).

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

At first quarter’s end, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 4% from the previous quarter. The graph below displays the number of hedge funds with bullish position in NWL over the last 23 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Newell Brands Inc. (NASDAQ:NWL) was held by Icahn Capital LP, which reported holding $1170.4 million worth of stock at the end of December. It was followed by Pzena Investment Management with a $652.1 million position. Other investors bullish on the company included Archon Capital Management, Arrowstreet Capital, and Millennium Management. In terms of the portfolio weights assigned to each position Icahn Capital LP allocated the biggest weight to Newell Brands Inc. (NASDAQ:NWL), around 4.91% of its 13F portfolio. Southport Management is also relatively very bullish on the stock, setting aside 4.46 percent of its 13F equity portfolio to NWL.

As industrywide interest jumped, some big names have been driving this bullishness. Driehaus Capital, managed by Richard Driehaus, created the most outsized position in Newell Brands Inc. (NASDAQ:NWL). Driehaus Capital had $4.7 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $3.4 million position during the quarter. The following funds were also among the new NWL investors: Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, Ronald Hua’s Qtron Investments, and Crispin Odey’s Odey Asset Management Group.

Let’s also examine hedge fund activity in other stocks similar to Newell Brands Inc. (NASDAQ:NWL). These stocks are LPL Financial Holdings Inc (NASDAQ:LPLA), Westlake Chemical Corporation (NYSE:WLK), Universal Health Services, Inc. (NYSE:UHS), Lamb Weston Holdings, Inc. (NYSE:LW), IPG Photonics Corporation (NASDAQ:IPGP), Bausch Health Companies Inc. (NYSE:BHC), and Qiagen NV (NYSE:QGEN). This group of stocks’ market values match NWL’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
LPLA 38 1496713 -5
WLK 26 410629 4
UHS 43 882608 4
LW 38 493079 9
IPGP 31 416236 6
BHC 42 4076779 -1
QGEN 27 562548 3
Average 35 1191227 2.9

View table here if you experience formatting issues.

As you can see these stocks had an average of 35 hedge funds with bullish positions and the average amount invested in these stocks was $1191 million. That figure was $1952 million in NWL’s case. Universal Health Services, Inc. (NYSE:UHS) is the most popular stock in this table. On the other hand Westlake Chemical Corporation (NYSE:WLK) is the least popular one with only 26 bullish hedge fund positions. Compared to these stocks Newell Brands Inc. (NASDAQ:NWL) is even less popular than WLK. Our overall hedge fund sentiment score for NWL is 20.1. 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. Hedge funds dodged a bullet by taking a bearish stance towards NWL. Our calculations showed that the top 10 most popular hedge fund stocks returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th but managed to beat the market again by 7.7 percentage points. Unfortunately NWL wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was very bearish); NWL investors were disappointed as the stock returned 1.8% since the end of the first quarter (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

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