Do Hedge Funds Love Interpublic Group of Companies Inc (IPG)?
Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the first quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Interpublic Group of Companies Inc (NYSE:IPG) based on that data.
Is Interpublic Group of Companies Inc (NYSE:IPG) a buy, sell, or hold? Money managers are selling. The number of bullish hedge fund bets shrunk by 5 lately. Our calculations also showed that IPG 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). IPG was in 21 hedge funds' portfolios at the end of March. There were 26 hedge funds in our database with IPG positions at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most market participants, hedge funds are seen as worthless, outdated financial vehicles of the past. While there are more than 8000 funds with their doors open at the moment, Our researchers look at the bigwigs of this group, approximately 850 funds. It is estimated that this group of investors shepherd bulk of all hedge funds' total capital, and by keeping an eye on their top equity investments, Insider Monkey has determined numerous investment strategies that have historically outrun the broader indices. Insider Monkey's flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points per annum 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 .
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Peter Rathjens of Arrowstreet Capital[/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 go over the new hedge fund action encompassing Interpublic Group of Companies Inc (NYSE:IPG).
How are hedge funds trading Interpublic Group of Companies Inc (NYSE:IPG)?
At Q1's end, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -19% from the previous quarter. By comparison, 26 hedge funds held shares or bullish call options in IPG a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Pzena Investment Management held the most valuable stake in Interpublic Group of Companies Inc (NYSE:IPG), which was worth $244.4 million at the end of the third quarter. On the second spot was Ariel Investments which amassed $149.9 million worth of shares. Citadel Investment Group, GAMCO Investors, and AQR Capital Management 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 Ariel Investments allocated the biggest weight to Interpublic Group of Companies Inc (NYSE:IPG), around 2.63% of its 13F portfolio. Pzena Investment Management is also relatively very bullish on the stock, earmarking 1.85 percent of its 13F equity portfolio to IPG.
Judging by the fact that Interpublic Group of Companies Inc (NYSE:IPG) has witnessed falling interest from the entirety of the hedge funds we track, it's safe to say that there were a few fund managers that decided to sell off their positions entirely by the end of the first quarter. At the top of the heap, Israel Englander's Millennium Management cut the biggest stake of the "upper crust" of funds watched by Insider Monkey, totaling close to $8.2 million in stock, and Renaissance Technologies was right behind this move, as the fund said goodbye to about $4.7 million worth. These moves are interesting, as total hedge fund interest fell by 5 funds by the end of the first quarter.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Interpublic Group of Companies Inc (NYSE:IPG) but similarly valued. These stocks are Charles River Laboratories International Inc. (NYSE:CRL), Hubbell Incorporated (NYSE:HUBB), Assurant, Inc. (NYSE:AIZ), and Alteryx, Inc. (NYSE:AYX). This group of stocks' market caps resemble IPG's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CRL,36,862557,4 HUBB,15,272338,-8 AIZ,33,782609,8 AYX,43,1019690,-1 Average,31.75,734299,0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.75 hedge funds with bullish positions and the average amount invested in these stocks was $734 million. That figure was $594 million in IPG's case. Alteryx, Inc. (NYSE:AYX) is the most popular stock in this table. On the other hand Hubbell Incorporated (NYSE:HUBB) is the least popular one with only 15 bullish hedge fund positions. Interpublic Group of Companies Inc (NYSE:IPG) 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 12.2% in 2020 through June 17th and surpassed the market by 14.8 percentage points. Unfortunately IPG wasn't nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); IPG investors were disappointed as the stock returned 9.4% 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.
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Disclosure: None. This article was originally published at Insider Monkey.
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