Is FMC Corporation (FMC) A Good Stock To Buy?

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 FMC Corporation (NYSE:FMC) based on that data.

Is FMC a good stock to buy? FMC Corporation (NYSE:FMC) investors should pay attention to a decrease in hedge fund sentiment recently. FMC Corporation (NYSE:FMC) was in 32 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 46. There were 45 hedge funds in our database with FMC positions at the end of the fourth quarter. Our calculations also showed that FMC isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).

If you'd ask most traders, hedge funds are viewed as worthless, outdated investment tools of years past. While there are greater than 8000 funds in operation at present, Our experts look at the aristocrats of this club, approximately 850 funds. These money managers have their hands on the majority of the hedge fund industry's total capital, and by monitoring their matchless investments, Insider Monkey has discovered many investment strategies that have historically outrun the market. Insider Monkey's flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

10 best stocks according to billionaire Larry Robbins10 best stocks according to billionaire Larry Robbins
10 best stocks according to billionaire Larry Robbins

Larry Robbins of Glenview Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. 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. With all of this in mind we're going to view the latest hedge fund action regarding FMC Corporation (NYSE:FMC).

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

At first quarter's end, a total of 32 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -29% from the previous quarter. By comparison, 39 hedge funds held shares or bullish call options in FMC a year ago. With the smart money's positions undergoing their usual ebb and flow, there exists an "upper tier" of notable hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, D E Shaw, managed by D. E. Shaw, holds the number one position in FMC Corporation (NYSE:FMC). D E Shaw has a $116.8 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Cardinal Capital, led by Amy Minella, holding a $108.2 million position; the fund has 2.6% of its 13F portfolio invested in the stock. Some other peers that hold long positions contain Larry Robbins's Glenview Capital, Ross Turner's Pelham Capital and Charles Paquelet's Skylands Capital. In terms of the portfolio weights assigned to each position Pelham Capital allocated the biggest weight to FMC Corporation (NYSE:FMC), around 5.14% of its 13F portfolio. Lodge Hill Capital is also relatively very bullish on the stock, earmarking 4.79 percent of its 13F equity portfolio to FMC.

Because FMC Corporation (NYSE:FMC) has experienced a decline in interest from the smart money, we can see that there exists a select few fund managers that slashed their full holdings in the first quarter. At the top of the heap, Alexander Mitchell's Scopus Asset Management said goodbye to the largest position of all the hedgies monitored by Insider Monkey, comprising an estimated $21.9 million in stock. Zilvinas Mecelis's fund, Covalis Capital, also sold off its stock, about $21.8 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 13 funds in the first quarter.

Let's go over hedge fund activity in other stocks similar to FMC Corporation (NYSE:FMC). These stocks are Domino's Pizza, Inc. (NYSE:DPZ), Fair Isaac Corporation (NYSE:FICO), Equitable Holdings, Inc. (NYSE:EQH), argenx SE (NASDAQ:ARGX), Agnico Eagle Mines Limited (NYSE:AEM), DENTSPLY SIRONA Inc. (NASDAQ:XRAY), and Sociedad Química y Minera de Chile S.A. (NYSE:SQM). This group of stocks' market caps are similar to FMC's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position DPZ,29,2176091,-8 FICO,27,1355293,-11 EQH,44,1699164,-2 ARGX,27,1375874,5 AEM,28,247180,-8 XRAY,26,1218918,-2 SQM,16,142465,2 Average,28.1,1173569,-3.4 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 28.1 hedge funds with bullish positions and the average amount invested in these stocks was $1174 million. That figure was $500 million in FMC's case. Equitable Holdings, Inc. (NYSE:EQH) is the most popular stock in this table. On the other hand Sociedad Química y Minera de Chile S.A. (NYSE:SQM) is the least popular one with only 16 bullish hedge fund positions. FMC Corporation (NYSE:FMC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FMC is 41.4. 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 22.8% in 2021 through July 2nd and beat the market again by 6 percentage points. Unfortunately FMC wasn't nearly as popular as these 5 stocks and hedge funds that were betting on FMC were disappointed as the stock returned -1.5% since the end of March (through 7/2) 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.

Matt Earle

Matthew Earle is the Founder of MiningFeeds. In 2005, Matt founded to provide data and information to the mining investment community. This site was merged with Highgrade Review to form MiningFeeds. Matt has a B.Sc. degree with a minor in geology from the University of Toronto.

By Matt Earle

Matthew Earle is the Founder of MiningFeeds. In 2005, Matt founded to provide data and information to the mining investment community. This site was merged with Highgrade Review to form MiningFeeds. Matt has a B.Sc. degree with a minor in geology from the University of Toronto.

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