In this article you are going to find out whether hedge funds think Huntington Bancshares Incorporated (NASDAQ:HBAN) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It's not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Huntington Bancshares Incorporated (NASDAQ:HBAN) was in 29 hedge funds' portfolios at the end of the first quarter of 2020. HBAN investors should be aware of an increase in hedge fund sentiment recently. There were 25 hedge funds in our database with HBAN holdings at the end of the previous quarter. Our calculations also showed that HBAN 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.
At the moment there are a multitude of formulas stock traders have at their disposal to appraise publicly traded companies. Two of the less known formulas are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the top picks of the best hedge fund managers can beat the S&P 500 by a superb amount (see the details here).
[caption id="attachment_365194" align="aligncenter" width="399"] David E. Shaw of D.E. Shaw[/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 as well as this tiny lithium play. 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. Keeping this in mind let's go over the recent hedge fund action surrounding Huntington Bancshares Incorporated (NASDAQ:HBAN).
How are hedge funds trading Huntington Bancshares Incorporated (NASDAQ:HBAN)?
At the end of the first quarter, a total of 29 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 16% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards HBAN over the last 18 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
Among these funds, Millennium Management held the most valuable stake in Huntington Bancshares Incorporated (NASDAQ:HBAN), which was worth $30 million at the end of the third quarter. On the second spot was Balyasny Asset Management which amassed $8.9 million worth of shares. Arrowstreet Capital, Citadel Investment Group, and D E Shaw 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 Elizabeth Park Capital Management allocated the biggest weight to Huntington Bancshares Incorporated (NASDAQ:HBAN), around 3.62% of its 13F portfolio. Balyasny Asset Management is also relatively very bullish on the stock, setting aside 0.11 percent of its 13F equity portfolio to HBAN.
With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Millennium Management, managed by Israel Englander, established the largest position in Huntington Bancshares Incorporated (NASDAQ:HBAN). Millennium Management had $30 million invested in the company at the end of the quarter. Dmitry Balyasny's Balyasny Asset Management also made a $8.9 million investment in the stock during the quarter. The following funds were also among the new HBAN investors: Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, Ken Griffin's Citadel Investment Group, and D. E. Shaw's D E Shaw.
Let's also examine hedge fund activity in other stocks similar to Huntington Bancshares Incorporated (NASDAQ:HBAN). We will take a look at PerkinElmer, Inc. (NYSE:PKI), Autohome Inc (NYSE:ATHM), Carvana Co. (NYSE:CVNA), and Lamb Weston Holdings, Inc. (NYSE:LW). This group of stocks' market values resemble HBAN's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PKI,21,647867,1 ATHM,15,708219,2 CVNA,52,1819908,-1 LW,29,277239,-3 Average,29.25,863308,-0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.25 hedge funds with bullish positions and the average amount invested in these stocks was $863 million. That figure was $86 million in HBAN's case. Carvana Co. (NYSE:CVNA) is the most popular stock in this table. On the other hand Autohome Inc (NYSE:ATHM) is the least popular one with only 15 bullish hedge fund positions. Huntington Bancshares Incorporated (NASDAQ:HBAN) is not the least popular stock in this group but hedge fund interest is still below average. 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 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 gained 8.3% in 2020 through the end of May and surpassed the market by 13.2 percentage points. Unfortunately HBAN wasn't nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); HBAN investors were disappointed as the stock returned 8.3% during the second 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 in 2020.
Disclosure: None. This article was originally published at Insider Monkey.