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 821 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 March 31st, a week after the market trough. In this article we look at what those investors think of Comerica Incorporated (NYSE:CMA).
Comerica Incorporated (NYSE:CMA) shareholders have witnessed a decrease in hedge fund interest recently. Our calculations also showed that CMA isn't among the 30 most popular stocks among hedge funds (click for Q1 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 51 percentage points since March 2017 (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 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_673876" align="aligncenter" width="396"] John Overdeck of Two Sigma Advisors[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020's unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let's analyze the new hedge fund action encompassing Comerica Incorporated (NYSE:CMA).
What have hedge funds been doing with Comerica Incorporated (NYSE:CMA)?
Heading into the second quarter of 2020, a total of 33 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -8% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards CMA over the last 18 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Comerica Incorporated (NYSE:CMA) was held by AQR Capital Management, which reported holding $46.6 million worth of stock at the end of September. It was followed by Two Sigma Advisors with a $38.7 million position. Other investors bullish on the company included D E Shaw, Adage Capital Management, and Arrowstreet Capital. In terms of the portfolio weights assigned to each position MSDC Management allocated the biggest weight to Comerica Incorporated (NYSE:CMA), around 4.84% of its 13F portfolio. Factorial Partners is also relatively very bullish on the stock, setting aside 1.62 percent of its 13F equity portfolio to CMA.
Since Comerica Incorporated (NYSE:CMA) has witnessed bearish sentiment from hedge fund managers, logic holds that there is a sect of money managers that slashed their positions entirely in the third quarter. At the top of the heap, Michael Kharitonov and Jon David McAuliffe's Voleon Capital cut the largest investment of the "upper crust" of funds watched by Insider Monkey, totaling an estimated $6.3 million in stock. Paul Tudor Jones's fund, Tudor Investment Corp, also cut its stock, about $3.7 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 3 funds in the third quarter.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Comerica Incorporated (NYSE:CMA) but similarly valued. These stocks are Beyond Meat, Inc. (NASDAQ:BYND), Syneos Health, Inc. (NASDAQ:SYNH), The Mosaic Company (NYSE:MOS), and 51job, Inc. (NASDAQ:JOBS). This group of stocks' market caps resemble CMA's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BYND,13,91343,-6 SYNH,22,132485,2 MOS,29,386708,0 JOBS,9,18622,1 Average,18.25,157290,-0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.25 hedge funds with bullish positions and the average amount invested in these stocks was $157 million. That figure was $255 million in CMA's case. The Mosaic Company (NYSE:MOS) is the most popular stock in this table. On the other hand 51job, Inc. (NASDAQ:JOBS) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Comerica Incorporated (NYSE:CMA) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks returned 8.3% in 2020 through the end of May but still managed to beat the market by 13.2 percentage points. Hedge funds were also right about betting on CMA as the stock returned 23.9% so far in Q2 (through the end of May) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.