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The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 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 June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought Popular Inc (NASDAQ:BPOP) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.
Is Popular Inc (NASDAQ:BPOP) worth your attention right now? Prominent investors were turning bullish. The number of long hedge fund bets moved up by 5 recently. Popular Inc (NASDAQ:BPOP) was in 33 hedge funds' portfolios at the end of June. The all time high for this statistics is 33. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that BPOP isn't among the 30 most popular stocks among hedge funds (click for Q2 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 today’s marketplace there are plenty of tools market participants have at their disposal to grade stocks. A couple of the most useful tools are hedge fund and insider trading sentiment. 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 significant margin (see the details here).
Noam Gottesman of GLG Partners
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, this “mom” trader turned $2000 into $2 million within 2 years. So, we are checking out her best trade idea of the month. Cannabis stocks are roaring back in 2020, which is why we are also checking out this under-the-radar stock. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We go through lists like the 10 most profitable companies in the world 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. Keeping this in mind let's take a peek at the new hedge fund action encompassing Popular Inc (NASDAQ:BPOP).
Hedge fund activity in Popular Inc (NASDAQ:BPOP)
Heading into the third quarter of 2020, a total of 33 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 18% from one quarter earlier. By comparison, 30 hedge funds held shares or bullish call options in BPOP 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, Polaris Capital Management was the largest shareholder of Popular Inc (NASDAQ:BPOP), with a stake worth $144.9 million reported as of the end of September. Trailing Polaris Capital Management was AQR Capital Management, which amassed a stake valued at $84.6 million. Two Creeks Capital Management, Citadel Investment Group, and GLG Partners 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 Raging Capital Management allocated the biggest weight to Popular Inc (NASDAQ:BPOP), around 9.74% of its 13F portfolio. Polaris Capital Management is also relatively very bullish on the stock, earmarking 7.16 percent of its 13F equity portfolio to BPOP.
With a general bullishness amongst the heavyweights, key money managers have jumped into Popular Inc (NASDAQ:BPOP) headfirst. Two Creeks Capital Management, managed by Ryan Pedlow, created the biggest position in Popular Inc (NASDAQ:BPOP). Two Creeks Capital Management had $39.7 million invested in the company at the end of the quarter. Renaissance Technologies also made a $11.5 million investment in the stock during the quarter. The following funds were also among the new BPOP investors: David Andre and Astro Teller's Cerebellum Capital, Greg Eisner's Engineers Gate Manager, and Anton Schutz's Mendon Capital Advisors.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Popular Inc (NASDAQ:BPOP) but similarly valued. These stocks are Penske Automotive Group, Inc. (NYSE:PAG), Aerojet Rocketdyne Holdings Inc (NYSE:AJRD), First Horizon National Corporation (NYSE:FHN), TFI International Inc. (NYSE:TFII), Vicor Corp (NASDAQ:VICR), New Residential Investment Corp (NYSE:NRZ), and Companhia Paranaense de Energia - COPEL (NYSE:ELP). All of these stocks' market caps are closest to BPOP's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PAG,21,83068,2 AJRD,25,405251,2 FHN,35,384471,4 TFII,10,67009,-2 VICR,19,81691,5 NRZ,22,121379,-1 ELP,12,39175,5 Average,20.6,168863,2.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.6 hedge funds with bullish positions and the average amount invested in these stocks was $169 million. That figure was $521 million in BPOP's case. First Horizon National Corporation (NYSE:FHN) is the most popular stock in this table. On the other hand TFI International Inc. (NYSE:TFII) is the least popular one with only 10 bullish hedge fund positions. Popular Inc (NASDAQ:BPOP) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BPOP is 86. 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 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 33% in 2020 through the end of August and beat the market by 23.2 percentage points. Unfortunately BPOP wasn't nearly as popular as these 10 stocks and hedge funds that were betting on BPOP were disappointed as the stock returned -0.3% during the same time period 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 many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.