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. We at 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. Stocks kept going up since then. In this article we look at how hedge funds traded Manulife Financial Corporation (NYSE:MFC) and determine whether the smart money was really smart about this stock.
Manulife Financial Corporation (NYSE:MFC) shareholders have witnessed a decrease in enthusiasm from smart money lately. Manulife Financial Corporation (NYSE:MFC) was in 19 hedge funds' portfolios at the end of June. The all time high for this statistics is 21. Our calculations also showed that MFC 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.
To most traders, hedge funds are assumed to be worthless, outdated investment tools of the past. While there are greater than 8000 funds trading at present, Our experts choose to focus on the leaders of this club, about 850 funds. These hedge fund managers manage bulk of the hedge fund industry's total capital, and by paying attention to their unrivaled stock picks, Insider Monkey has brought to light numerous investment strategies that have historically outstripped the market. Insider Monkey's flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 34% since February 2017 (through August 17th) even though the market was up 53% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
Robert Richards of Heathbridge Capital Management
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 are checking out this junior gold mining stock and 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 to get excerpts of these letters in your inbox. Keeping this in mind we're going to take a look at the key hedge fund action regarding Manulife Financial Corporation (NYSE:MFC).
How have hedgies been trading Manulife Financial Corporation (NYSE:MFC)?
At Q2's end, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -5% from the previous quarter. By comparison, 16 hedge funds held shares or bullish call options in MFC a year ago. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Manulife Financial Corporation (NYSE:MFC), with a stake worth $51.3 million reported as of the end of September. Trailing Renaissance Technologies was GLG Partners, which amassed a stake valued at $40.8 million. Galibier Capital Management, Heathbridge Capital Management, and Two Sigma Advisors 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 Galibier Capital Management allocated the biggest weight to Manulife Financial Corporation (NYSE:MFC), around 10.53% of its 13F portfolio. Heathbridge Capital Management is also relatively very bullish on the stock, earmarking 8.82 percent of its 13F equity portfolio to MFC.
Due to the fact that Manulife Financial Corporation (NYSE:MFC) has faced declining sentiment from hedge fund managers, it's safe to say that there exists a select few funds that decided to sell off their positions entirely by the end of the second quarter. Interestingly, Ray Dalio's Bridgewater Associates sold off the biggest position of the 750 funds tracked by Insider Monkey, valued at an estimated $7.4 million in stock. Matthew Hulsizer's fund, PEAK6 Capital Management, also sold off its stock, about $1.6 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 1 funds by the end of the second quarter.
Let's go over hedge fund activity in other stocks similar to Manulife Financial Corporation (NYSE:MFC). We will take a look at AutoZone, Inc. (NYSE:AZO), Yum! Brands, Inc. (NYSE:YUM), Republic Services, Inc. (NYSE:RSG), KKR & Co Inc. (NYSE:KKR), Datadog, Inc. (NASDAQ:DDOG), Hormel Foods Corporation (NYSE:HRL), and PACCAR Inc (NASDAQ:PCAR). This group of stocks' market valuations match MFC's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AZO,55,2395499,10 YUM,47,1633184,6 RSG,37,821669,5 KKR,45,3339623,-3 DDOG,57,2363237,13 HRL,27,440889,-1 PCAR,30,244385,-8 Average,42.6,1605498,3.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 42.6 hedge funds with bullish positions and the average amount invested in these stocks was $1605 million. That figure was $171 million in MFC's case. Datadog, Inc. (NASDAQ:DDOG) is the most popular stock in this table. On the other hand Hormel Foods Corporation (NYSE:HRL) is the least popular one with only 27 bullish hedge fund positions. Compared to these stocks Manulife Financial Corporation (NYSE:MFC) is even less popular than HRL. Our overall hedge fund sentiment score for MFC is 31.1. 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. Hedge funds dodged a bullet by taking a bearish stance towards MFC. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 24.8% in 2020 through the end of September but managed to beat the market by 19.3 percentage points. Unfortunately MFC wasn't nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); MFC investors were disappointed as the stock returned 3.6% in the third 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 so far in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.