Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 900 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Jones Lang LaSalle Inc (NYSE:JLL).
Jones Lang LaSalle Inc (NYSE:JLL) has experienced an increase in hedge fund sentiment of late. Jones Lang LaSalle Inc (NYSE:JLL) was in 31 hedge funds' portfolios at the end of June. The all time high for this statistic is 31. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that JLL isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).
In the financial world there are a large number of gauges investors put to use to evaluate publicly traded companies. A couple of the most under-the-radar gauges are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the best picks of the top fund managers can outclass the S&P 500 by a very impressive margin (see the details here). Also, our monthly newsletter's portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.
Ken Heebner of Capital Growth Management
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Do Hedge Funds Think JLL Is A Good Stock To Buy Now?
At the end of June, a total of 31 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 55% from one quarter earlier. On the other hand, there were a total of 23 hedge funds with a bullish position in JLL a year ago. With hedge funds' capital changing hands, there exists a select group of key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
More specifically, Generation Investment Management was the largest shareholder of Jones Lang LaSalle Inc (NYSE:JLL), with a stake worth $920.3 million reported as of the end of June. Trailing Generation Investment Management was Ariel Investments, which amassed a stake valued at $206.3 million. Maverick Capital, Motley Fool Asset Management, and Diamond Hill Capital 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 Generation Investment Management allocated the biggest weight to Jones Lang LaSalle Inc (NYSE:JLL), around 3.82% of its 13F portfolio. Land & Buildings Investment Management is also relatively very bullish on the stock, designating 2.41 percent of its 13F equity portfolio to JLL.
As industrywide interest jumped, some big names were breaking ground themselves. Maverick Capital, managed by Lee Ainslie, initiated the biggest position in Jones Lang LaSalle Inc (NYSE:JLL). Maverick Capital had $171.7 million invested in the company at the end of the quarter. Ken Heebner's Capital Growth Management also made a $23.5 million investment in the stock during the quarter. The following funds were also among the new JLL investors: Peter Seuss's Prana Capital Management, Ben Levine, Andrew Manuel and Stefan Renold's LMR Partners, and Robert Pohly's Samlyn Capital.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Jones Lang LaSalle Inc (NYSE:JLL) but similarly valued. We will take a look at Proofpoint Inc (NASDAQ:PFPT), Penumbra Inc (NYSE:PEN), Carlisle Companies, Inc. (NYSE:CSL), Natera Inc (NASDAQ:NTRA), Banco de Chile (NYSE:BCH), Dolby Laboratories, Inc. (NYSE:DLB), and Comerica Incorporated (NYSE:CMA). This group of stocks' market values match JLL's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PFPT,48,2591761,26 PEN,30,571116,3 CSL,17,146681,-1 NTRA,52,1896341,11 BCH,7,45933,2 DLB,31,748482,-3 CMA,33,547103,1 Average,31.1,935345,5.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.1 hedge funds with bullish positions and the average amount invested in these stocks was $935 million. That figure was $1554 million in JLL's case. Natera Inc (NASDAQ:NTRA) is the most popular stock in this table. On the other hand Banco de Chile (NYSE:BCH) is the least popular one with only 7 bullish hedge fund positions. Jones Lang LaSalle Inc (NYSE:JLL) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for JLL is 66.7. 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 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. A small number of hedge funds were also right about betting on JLL as the stock returned 29.8% since the end of the second quarter (through 10/15) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.