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In this article we will check out the progression of hedge fund sentiment towards Fidelity National Information Services Inc. (NYSE:FIS) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Is FIS stock a buy or sell? Fidelity National Information Services Inc. (NYSE:FIS) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 88 hedge funds' portfolios at the end of December. Our calculations also showed that FIS isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings). At the end of this article we will also compare FIS to other stocks including 0, British American Tobacco plc (NYSE:BTI), and Vale SA (NYSE:VALE) to get a better sense of its popularity.
In the 21st century investor’s toolkit there are many gauges investors employ to value publicly traded companies. A couple of the most innovative gauges are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the top picks of the best money managers can beat the S&P 500 by a solid amount (see the details here).
Andreas Halvorsen of Viking Global
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Do Hedge Funds Think FIS Is A Good Stock To Buy Now?
At the end of December, a total of 88 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 105 hedge funds with a bullish position in FIS a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Viking Global was the largest shareholder of Fidelity National Information Services Inc. (NYSE:FIS), with a stake worth $1674.2 million reported as of the end of December. Trailing Viking Global was Select Equity Group, which amassed a stake valued at $754.5 million. Cantillon Capital Management, Farallon Capital, and Lone Pine 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 Park Presidio Capital allocated the biggest weight to Fidelity National Information Services Inc. (NYSE:FIS), around 8.9% of its 13F portfolio. Cadian Capital is also relatively very bullish on the stock, designating 8.57 percent of its 13F equity portfolio to FIS.
Seeing as Fidelity National Information Services Inc. (NYSE:FIS) has experienced a decline in interest from the aggregate hedge fund industry, it's safe to say that there was a specific group of fund managers that elected to cut their positions entirely in the fourth quarter. It's worth mentioning that Panayotis Takis Sparaggis's Alkeon Capital Management said goodbye to the largest stake of the "upper crust" of funds followed by Insider Monkey, comprising about $142.8 million in stock, and Brandon Haley's Holocene Advisors was right behind this move, as the fund sold off about $69.2 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's check out hedge fund activity in other stocks similar to Fidelity National Information Services Inc. (NYSE:FIS). We will take a look at 0, British American Tobacco plc (NYSE:BTI), Vale SA (NYSE:VALE), Deere & Company (NYSE:DE), Micron Technology, Inc. (NASDAQ:MU), Mondelez International Inc (NASDAQ:MDLZ), and Mercadolibre Inc (NASDAQ:MELI). This group of stocks' market values match FIS's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ABNB,68,1610985,68 BTI,10,832550,3 VALE,35,2909481,0 DE,54,1804359,12 MU,100,8144429,21 MDLZ,50,2626457,0 MELI,79,8766711,-2 Average,56.6,3813567,14.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 56.6 hedge funds with bullish positions and the average amount invested in these stocks was $3814 million. That figure was $9181 million in FIS's case. Micron Technology, Inc. (NASDAQ:MU) is the most popular stock in this table. On the other hand British American Tobacco plc (NYSE:BTI) is the least popular one with only 10 bullish hedge fund positions. Fidelity National Information Services Inc. (NYSE:FIS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FIS is 72.1. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 7% in 2021 through March 12th and beat the market again by 1.6 percentage points. Unfortunately FIS wasn't nearly as popular as these 30 stocks and hedge funds that were betting on FIS were disappointed as the stock returned 3.7% since the end of December (through 3/12) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 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.