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A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on FBL Financial Group, Inc. (NYSE:FFG).
Is FFG a good stock to buy now? FBL Financial Group, Inc. (NYSE:FFG) has experienced an increase in hedge fund interest in recent months. FBL Financial Group, Inc. (NYSE:FFG) was in 11 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistics is 9. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that FFG isn't among the 30 most popular stocks among hedge funds (click for Q3 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.
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 monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Clint Carlson of Carlson Capital
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 recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks 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. With all of this in mind we're going to take a glance at the new hedge fund action encompassing FBL Financial Group, Inc. (NYSE:FFG).
Do Hedge Funds Think FFG Is A Good Stock To Buy Now?
At third quarter's end, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 83% from the previous quarter. By comparison, 9 hedge funds held shares or bullish call options in FFG a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in FBL Financial Group, Inc. (NYSE:FFG) was held by Carlson Capital, which reported holding $12.8 million worth of stock at the end of September. It was followed by GLG Partners with a $7.8 million position. Other investors bullish on the company included Royce & Associates, Millennium Management, and Point72 Asset Management. In terms of the portfolio weights assigned to each position Capital Returns Management allocated the biggest weight to FBL Financial Group, Inc. (NYSE:FFG), around 9.22% of its 13F portfolio. Carlson Capital is also relatively very bullish on the stock, designating 0.37 percent of its 13F equity portfolio to FFG.
As industrywide interest jumped, specific money managers have jumped into FBL Financial Group, Inc. (NYSE:FFG) headfirst. Carlson Capital, managed by Clint Carlson, established the largest position in FBL Financial Group, Inc. (NYSE:FFG). Carlson Capital had $12.8 million invested in the company at the end of the quarter. Noam Gottesman's GLG Partners also initiated a $7.8 million position during the quarter. The other funds with new positions in the stock are Steve Cohen's Point72 Asset Management, Ron Bobman's Capital Returns Management, and Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as FBL Financial Group, Inc. (NYSE:FFG) but similarly valued. These stocks are Vista Outdoor Inc (NYSE:VSTO), Calavo Growers, Inc. (NASDAQ:CVGW), Fortuna Silver Mines Inc. (NYSE:FSM), NBT Bancorp Inc. (NASDAQ:NBTB), FB Financial Corporation (NYSE:FBK), Stewart Information Services Corp (NYSE:STC), and Helios Technologies, Inc. (NASDAQ:HLIO). This group of stocks' market values are closest to FFG's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position VSTO,28,257079,6 CVGW,11,80472,-3 FSM,13,53788,4 NBTB,8,10403,-1 FBK,9,49679,-3 STC,19,103657,4 HLIO,8,55418,-1 Average,13.7,87214,0.9 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.7 hedge funds with bullish positions and the average amount invested in these stocks was $87 million. That figure was $47 million in FFG's case. Vista Outdoor Inc (NYSE:VSTO) is the most popular stock in this table. On the other hand NBT Bancorp Inc. (NASDAQ:NBTB) is the least popular one with only 8 bullish hedge fund positions. FBL Financial Group, Inc. (NYSE:FFG) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for FFG is 47.5. 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 negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and surpassed the market again by 16.2 percentage points. Unfortunately FFG wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); FFG investors were disappointed as the stock returned 9.9% since the end of September (through 12/8) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.