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Will Hedge Funds Ever Come Back To Grupo Supervielle S.A. (SUPV)?

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Abigail Fisher
·6 min read
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Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that's why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to smartest analysts and expensive data/information sources that individual investors can't match. So should one consider investing in Grupo Supervielle S.A. (NYSE:SUPV)? The smart money sentiment can provide an answer to this question.

Is Grupo Supervielle S.A. (NYSE:SUPV) an excellent investment today? Investors who are in the know were in a bearish mood. The number of bullish hedge fund positions went down by 1 recently. Grupo Supervielle S.A. (NYSE:SUPV) was in 3 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistics is 16. Our calculations also showed that SUPV isn't among the 30 most popular stocks among hedge funds (click for Q3 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 numerous methods market participants put to use to assess publicly traded companies. A pair of the less utilized methods are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the best picks of the best fund managers can beat the broader indices by a superb amount (see the details here).

Casey Whalen Truvvo Partners
Casey Whalen Truvvo Partners

Casey Whalen of Truvvo Partners

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website.Now let's take a look at the recent hedge fund action surrounding Grupo Supervielle S.A. (NYSE:SUPV).

How are hedge funds trading Grupo Supervielle S.A. (NYSE:SUPV)?

Heading into the fourth quarter of 2020, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -25% from the second quarter of 2020. On the other hand, there were a total of 6 hedge funds with a bullish position in SUPV a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).

More specifically, Highland Capital Management was the largest shareholder of Grupo Supervielle S.A. (NYSE:SUPV), with a stake worth $0.3 million reported as of the end of September. Trailing Highland Capital Management was Citadel Investment Group, which amassed a stake valued at $0 million. Truvvo Partners was 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 Highland Capital Management allocated the biggest weight to Grupo Supervielle S.A. (NYSE:SUPV), around 0.08% of its 13F portfolio. Truvvo Partners is also relatively very bullish on the stock, earmarking 0.02 percent of its 13F equity portfolio to SUPV.

Due to the fact that Grupo Supervielle S.A. (NYSE:SUPV) has faced bearish sentiment from the entirety of the hedge funds we track, we can see that there is a sect of fund managers that decided to sell off their positions entirely heading into Q4. At the top of the heap, Renaissance Technologies dumped the biggest stake of all the hedgies watched by Insider Monkey, worth about $0.1 million in stock, and Donald Sussman's Paloma Partners was right behind this move, as the fund sold off about $0 million worth. These transactions are interesting, as aggregate hedge fund interest fell by 1 funds heading into Q4.

Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Grupo Supervielle S.A. (NYSE:SUPV) but similarly valued. We will take a look at GP Strategies Corporation (NYSE:GPX), National Bankshares Inc. (NASDAQ:NKSH), Jiayin Group Inc. (NASDAQ:JFIN), Sesen Bio, Inc. (NASDAQ:SESN), Big 5 Sporting Goods Corporation (NASDAQ:BGFV), IRSA Inversiones y Representaciones Sociedad Anónima (NYSE:IRS), and Aquestive Therapeutics, Inc. (NASDAQ:AQST). This group of stocks' market caps resemble SUPV's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GPX,9,49256,-2 NKSH,3,11806,1 JFIN,1,34,-2 SESN,6,7842,1 BGFV,9,18141,3 IRS,5,10713,0 AQST,8,11570,1 Average,5.9,15623,0.3 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 5.9 hedge funds with bullish positions and the average amount invested in these stocks was $16 million. That figure was $0 million in SUPV's case. GP Strategies Corporation (NYSE:GPX) is the most popular stock in this table. On the other hand Jiayin Group Inc. (NASDAQ:JFIN) is the least popular one with only 1 bullish hedge fund positions. Grupo Supervielle S.A. (NYSE:SUPV) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SUPV is 22.1. 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 negative signal and 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 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 28.1% in 2020 through November 23rd and surpassed the market again by 15.4 percentage points. Unfortunately SUPV wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); SUPV investors were disappointed as the stock returned 5.5% since the end of September (through 11/23) 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 most of these stocks already outperformed the market in 2020.

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Disclosure: None. This article was originally published at Insider Monkey.

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