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Credicorp Ltd. (BAP) Fell Out Of Favor With Hedge Funds

Debasis Saha
·6 mins read

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 second 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 5 years and analyze what the smart money thinks of Credicorp Ltd. (NYSE:BAP) based on that data and determine whether they were really smart about the stock.

Is Credicorp Ltd. (NYSE:BAP) the right pick for your portfolio? Money managers were getting less optimistic. The number of long hedge fund bets dropped by 2 recently. Credicorp Ltd. (NYSE:BAP) was in 20 hedge funds' portfolios at the end of the second quarter of 2020. The all time high for this statistics is 28. Our calculations also showed that BAP isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). Video: Watch our video about the top 5 most popular hedge fund stocks.

At the moment there are many formulas stock traders have at their disposal to assess publicly traded companies. A couple of the less utilized formulas are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the best picks of the best fund managers can beat their index-focused peers by a very impressive margin (see the details here).

Paul Marshall Marshall Wace
Paul Marshall Marshall Wace

Paul Marshall of Marshall Wace

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we are checking out this junior gold mining stock and we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website to get excerpts of these letters in your inbox. Keeping this in mind we're going to analyze the key hedge fund action regarding Credicorp Ltd. (NYSE:BAP).

How are hedge funds trading Credicorp Ltd. (NYSE:BAP)?

Heading into the third quarter of 2020, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of -9% from the previous quarter. On the other hand, there were a total of 20 hedge funds with a bullish position in BAP a year ago. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is BAP A Good Stock To Buy?
Is BAP A Good Stock To Buy?

The largest stake in Credicorp Ltd. (NYSE:BAP) was held by Fisher Asset Management, which reported holding $83.6 million worth of stock at the end of September. It was followed by Marshall Wace LLP with a $34.2 million position. Other investors bullish on the company included AQR Capital Management, Ariel Investments, and Renaissance Technologies. In terms of the portfolio weights assigned to each position Sciencast Management allocated the biggest weight to Credicorp Ltd. (NYSE:BAP), around 0.32% of its 13F portfolio. Marshall Wace LLP is also relatively very bullish on the stock, earmarking 0.24 percent of its 13F equity portfolio to BAP.

Because Credicorp Ltd. (NYSE:BAP) has experienced declining sentiment from the entirety of the hedge funds we track, it's easy to see that there is a sect of hedge funds that elected to cut their full holdings in the second quarter. It's worth mentioning that John Overdeck and David Siegel's Two Sigma Advisors sold off the largest stake of the "upper crust" of funds watched by Insider Monkey, totaling about $3.3 million in stock. David Kowitz and Sheldon Kasowitz's fund, Indus Capital, also dropped its stock, about $2.1 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 2 funds in the second quarter.

Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Credicorp Ltd. (NYSE:BAP) but similarly valued. We will take a look at C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW), Monolithic Power Systems, Inc. (NASDAQ:MPWR), argenx SE (NASDAQ:ARGX), Molina Healthcare, Inc. (NYSE:MOH), Royal Caribbean Cruises Ltd. (NYSE:RCL), Avalara, Inc. (NYSE:AVLR), and CBOE Global Markets Inc (NASDAQ:CBOE). All of these stocks' market caps are similar to BAP's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CHRW,28,441588,-4 MPWR,36,555595,13 ARGX,29,1157644,4 MOH,34,1316051,2 RCL,31,381178,6 AVLR,37,1446149,3 CBOE,32,840386,-6 Average,32.4,876942,2.6 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 32.4 hedge funds with bullish positions and the average amount invested in these stocks was $877 million. That figure was $175 million in BAP's case. Avalara, Inc. (NYSE:AVLR) is the most popular stock in this table. On the other hand C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW) is the least popular one with only 28 bullish hedge fund positions. Compared to these stocks Credicorp Ltd. (NYSE:BAP) is even less popular than CHRW. Our overall hedge fund sentiment score for BAP is 24.4. 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. Hedge funds dodged a bullet by taking a bearish stance towards BAP. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 24.8% in 2020 through the end of September but managed to beat the market by 19.3 percentage points. Unfortunately BAP wasn't nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); BAP investors were disappointed as the stock returned -7.2% in the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.

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

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