The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 752 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of September 30th. In this article we look at what those investors think of Ford Motor Company (NYSE:F).
Is Ford Motor Company (NYSE:F) a good investment today? Investors who are in the know are selling. The number of bullish hedge fund bets went down by 4 in recent months. Our calculations also showed that F isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). F was in 35 hedge funds' portfolios at the end of September. There were 39 hedge funds in our database with F positions at the end of the previous quarter. Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.8% through November 21, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_338852" align="aligncenter" width="2480"] Richard S. Pzena of Pzena Investment Management[/caption]
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world's most bearish hedge fund that's more convinced than ever that a crash is coming, our long-short investment strategy doesn't rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds' buy/sell signals. Let's review the new hedge fund action surrounding Ford Motor Company (NYSE:F).
What does smart money think about Ford Motor Company (NYSE:F)?
At the end of the third quarter, a total of 35 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -10% from one quarter earlier. On the other hand, there were a total of 30 hedge funds with a bullish position in F 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.
When looking at the institutional investors followed by Insider Monkey, Greenhaven Associates, managed by Edgar Wachenheim, holds the biggest position in Ford Motor Company (NYSE:F). Greenhaven Associates has a $317.5 million position in the stock, comprising 6.4% of its 13F portfolio. The second most bullish fund manager is Pzena Investment Management, led by Richard S. Pzena, holding a $290.5 million position; 1.6% of its 13F portfolio is allocated to the company. Other members of the smart money with similar optimism include David E. Shaw's D E Shaw, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital and Renaissance Technologies. In terms of the portfolio weights assigned to each position Greenhaven Associates allocated the biggest weight to Ford Motor Company (NYSE:F), around 6.42% of its portfolio. Gabalex Capital is also relatively very bullish on the stock, dishing out 2.96 percent of its 13F equity portfolio to F.
Since Ford Motor Company (NYSE:F) has witnessed falling interest from the smart money, it's easy to see that there was a specific group of money managers who were dropping their entire stakes in the third quarter. Interestingly, Steve Cohen's Point72 Asset Management sold off the biggest position of the "upper crust" of funds tracked by Insider Monkey, worth about $99.9 million in stock. Matthew Tewksbury's fund, Stevens Capital Management, also dropped its stock, about $27.8 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 4 funds in the third quarter.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Ford Motor Company (NYSE:F) but similarly valued. We will take a look at Prudential Financial Inc (NYSE:PRU), Manulife Financial Corporation (NYSE:MFC), Baidu, Inc. (NASDAQ:BIDU), and The Allstate Corporation (NYSE:ALL). All of these stocks' market caps match F's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PRU,27,576526,-6 MFC,17,354745,1 BIDU,43,1745303,-1 ALL,44,1900363,7 Average,32.75,1144234,0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.75 hedge funds with bullish positions and the average amount invested in these stocks was $1144 million. That figure was $1153 million in F's case. The Allstate Corporation (NYSE:ALL) is the most popular stock in this table. On the other hand Manulife Financial Corporation (NYSE:MFC) is the least popular one with only 17 bullish hedge fund positions. Ford Motor Company (NYSE:F) is not the most popular stock in this group but hedge fund interest is still above average. 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 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately F wasn't nearly as popular as these 20 stocks and hedge funds that were betting on F were disappointed as the stock returned 0.5% during the fourth quarter (through the end of November) 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 many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.