Is Fortive Corporation (NYSE:FTV) a good stock to buy right now? Money managers are selling. The number of bullish hedge fund positions retreated by 5 in recent months. Our calculations also showed that FTV isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Let’s take a peek at the new hedge fund action regarding Fortive Corporation (NYSE:FTV).
How are hedge funds trading Fortive Corporation (NYSE:FTV)?
Heading into the first quarter of 2019, a total of 30 of the hedge funds tracked by Insider Monkey were long this stock, a change of -14% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in FTV over the last 14 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Phill Gross and Robert Atchinson’s Adage Capital Management has the most valuable position in Fortive Corporation (NYSE:FTV), worth close to $93.2 million, comprising 0.3% of its total 13F portfolio. The second largest stake is held by Jeffrey Gates of Gates Capital Management, with a $53.8 million position; 3% of its 13F portfolio is allocated to the stock. Remaining professional money managers with similar optimism include Robert Joseph Caruso’s Select Equity Group, Jonathan Barrett and Paul Segal’s Luminus Management and Daniel S. Och’s OZ Management.
Since Fortive Corporation (NYSE:FTV) has witnessed falling interest from hedge fund managers, logic holds that there was a specific group of funds that elected to cut their full holdings in the third quarter. At the top of the heap, Andrew Hahn’s Ursa Fund Management dropped the biggest position of the 700 funds followed by Insider Monkey, worth an estimated $1562 million in call options, and Daniel S. Och’s OZ Management was right behind this move, as the fund sold off about $510.7 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 5 funds in the third quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Fortive Corporation (NYSE:FTV) but similarly valued. These stocks are The Hershey Company (NYSE:HSY), Pioneer Natural Resources Company (NYSE:PXD), Ingersoll-Rand Plc (NYSE:IR), and T. Rowe Price Group, Inc. (NASDAQ:TROW). All of these stocks’ market caps resemble FTV’s market cap.
[table]
Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position
HSY,33,691268,4
PXD,62,2388164,4
IR,43,1477676,1
TROW,22,290370,5
Average,40,1211870,3.5
[/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 40 hedge funds with bullish positions and the average amount invested in these stocks was $1212 million. That figure was $405 million in FTV’s case. Pioneer Natural Resources Company (NYSE:PXD) is the most popular stock in this table. On the other hand T. Rowe Price Group, Inc. (NASDAQ:TROW) is the least popular one with only 22 bullish hedge fund positions. Fortive Corporation (NYSE:FTV) 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 PXD might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
