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. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Fiserv, Inc. (NASDAQ:FISV).
Fiserv, Inc. (NASDAQ:FISV) has seen a decrease in hedge fund interest of late. FISV was in 67 hedge funds' portfolios at the end of the first quarter of 2020. There were 78 hedge funds in our database with FISV positions at the end of the previous quarter. Our calculations also showed that FISV 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.
If you'd ask most stock holders, hedge funds are viewed as unimportant, old investment tools of yesteryear. While there are greater than 8000 funds trading at present, We look at the moguls of this group, about 850 funds. These hedge fund managers shepherd bulk of the hedge fund industry's total asset base, and by tailing their highest performing equity investments, Insider Monkey has formulated various investment strategies that have historically outpaced the broader indices. Insider Monkey's flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
[caption id="attachment_735641" align="aligncenter" width="399"] Michael Lowenstein of Kensico Capital[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, Europe is set to become the world’s largest cannabis market, so we checked out this European marijuana stock pitch. Also, we are still not out of the woods in terms of the coronavirus pandemic. So, we checked out this analyst’s “corona catalyst plays“. 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 Fiserv, Inc. (NASDAQ:FISV).
How are hedge funds trading Fiserv, Inc. (NASDAQ:FISV)?
Heading into the second quarter of 2020, a total of 67 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -14% from the fourth quarter of 2019. By comparison, 47 hedge funds held shares or bullish call options in FISV 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.
Of the funds tracked by Insider Monkey, John Armitage's Egerton Capital Limited has the largest position in Fiserv, Inc. (NASDAQ:FISV), worth close to $617 million, amounting to 6.4% of its total 13F portfolio. The second most bullish fund manager is Michael Lowenstein of Kensico Capital, with a $290.1 million position; 7.9% of its 13F portfolio is allocated to the company. Remaining professional money managers that hold long positions comprise Ken Griffin's Citadel Investment Group, Gabriel Plotkin's Melvin Capital Management and Tim Hurd and Ed Magnus's BlueSpruce Investments. In terms of the portfolio weights assigned to each position Toscafund Asset Management allocated the biggest weight to Fiserv, Inc. (NASDAQ:FISV), around 55.23% of its 13F portfolio. Caldera Capital is also relatively very bullish on the stock, designating 14.41 percent of its 13F equity portfolio to FISV.
Because Fiserv, Inc. (NASDAQ:FISV) has faced a decline in interest from the entirety of the hedge funds we track, it's safe to say that there is a sect of hedgies who sold off their full holdings last quarter. Interestingly, James Crichton's Hitchwood Capital Management sold off the biggest position of all the hedgies followed by Insider Monkey, valued at an estimated $84.3 million in stock. Jeffrey Hoffner's fund, Engle Capital, also dumped its stock, about $28 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 11 funds last quarter.
Let's now take a look at hedge fund activity in other stocks similar to Fiserv, Inc. (NASDAQ:FISV). These stocks are Caterpillar Inc. (NYSE:CAT), Stryker Corporation (NYSE:SYK), Becton, Dickinson and Company (NYSE:BDX), and CME Group Inc (NASDAQ:CME). This group of stocks' market values resemble FISV's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CAT,34,2186891,-18 SYK,48,903368,5 BDX,56,1266617,6 CME,62,2265510,8 Average,50,1655597,0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 50 hedge funds with bullish positions and the average amount invested in these stocks was $1656 million. That figure was $2949 million in FISV's case. CME Group Inc (NASDAQ:CME) is the most popular stock in this table. On the other hand Caterpillar Inc. (NYSE:CAT) is the least popular one with only 34 bullish hedge fund positions. Compared to these stocks Fiserv, Inc. (NASDAQ:FISV) 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 gained 7.9% in 2020 through May 22nd and still beat the market by 15.6 percentage points. Unfortunately FISV wasn't nearly as popular as these 10 stocks and hedge funds that were betting on FISV were disappointed as the stock returned 9.4% during the second quarter (through May 22nd) 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.