Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Vontier Corporation (NYSE:VNT).
Vontier Corporation (NYSE:VNT) investors should pay attention to a decrease in activity from the world’s largest hedge funds recently. Vontier Corporation (NYSE:VNT) was in 31 hedge funds’ portfolios at the end of September. The all time high for this statistic is 38. There were 34 hedge funds in our database with VNT holdings at the end of June. Our calculations also showed that VNT isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
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. Now let’s take a peek at the fresh hedge fund action surrounding Vontier Corporation (NYSE:VNT).
Bill Miller of Miller Value Partners
Do Hedge Funds Think VNT Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 31 of the hedge funds tracked by Insider Monkey were long this stock, a change of -9% from one quarter earlier. On the other hand, there were a total of 0 hedge funds with a bullish position in VNT a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Gates Capital Management was the largest shareholder of Vontier Corporation (NYSE:VNT), with a stake worth $149.1 million reported as of the end of September. Trailing Gates Capital Management was Laurion Capital Management, which amassed a stake valued at $100.7 million. Royce & Associates, Millennium Management, and Miller Value Partners 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 Key Square Capital Management allocated the biggest weight to Vontier Corporation (NYSE:VNT), around 6.85% of its 13F portfolio. DSAM Partners is also relatively very bullish on the stock, dishing out 4.6 percent of its 13F equity portfolio to VNT.
Since Vontier Corporation (NYSE:VNT) has faced bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there exists a select few fund managers that decided to sell off their entire stakes last quarter. It’s worth mentioning that Edward Goodnow’s Goodnow Investment Group dropped the biggest position of all the hedgies watched by Insider Monkey, totaling an estimated $3.5 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also said goodbye to its stock, about $1.8 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 3 funds last quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Vontier Corporation (NYSE:VNT) but similarly valued. These stocks are The AZEK Company Inc. (NYSE:AZEK), Watts Water Technologies Inc (NYSE:WTS), Range Resources Corp. (NYSE:RRC), Clean Harbors Inc (NYSE:CLH), Fate Therapeutics Inc (NASDAQ:FATE), Valvoline Inc. (NYSE:VVV), and Harley-Davidson, Inc. (NYSE:HOG). This group of stocks’ market valuations are similar to VNT’s market valuation.
[table]
Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position
AZEK,38,427310,1
WTS,16,515456,-2
RRC,25,527031,0
CLH,24,391049,0
FATE,36,2103428,-4
VVV,23,641833,-3
HOG,33,956467,-4
Average,27.9,794653,-1.7
[/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.9 hedge funds with bullish positions and the average amount invested in these stocks was $795 million. That figure was $806 million in VNT’s case. The AZEK Company Inc. (NYSE:AZEK) is the most popular stock in this table. On the other hand Watts Water Technologies Inc (NYSE:WTS) is the least popular one with only 16 bullish hedge fund positions. Vontier Corporation (NYSE:VNT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VNT is 60.6. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately VNT wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on VNT were disappointed as the stock returned -6.2% since the end of September (through 11/30) 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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.