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 have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their June 28 holdings, data that is available nowhere else. Should you consider frontdoor, inc. (NASDAQ:FTDR) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
frontdoor, inc. (NASDAQ:FTDR) has experienced an increase in activity from the world's largest hedge funds recently. FTDR was in 40 hedge funds' portfolios at the end of June. There were 34 hedge funds in our database with FTDR positions at the end of the previous quarter. Our calculations also showed that FTDR isn't among the 30 most popular stocks among hedge funds (view the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a lot of methods stock traders put to use to assess their stock investments. Some of the best methods are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the top picks of the elite money managers can outperform the S&P 500 by a healthy margin (see the details here).
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We're going to take a look at the fresh hedge fund action surrounding frontdoor, inc. (NASDAQ:FTDR).
What have hedge funds been doing with frontdoor, inc. (NASDAQ:FTDR)?
At Q2's end, a total of 40 of the hedge funds tracked by Insider Monkey were long this stock, a change of 18% from one quarter earlier. By comparison, 0 hedge funds held shares or bullish call options in FTDR a year ago. With hedge funds' capital changing hands, there exists a select group of notable hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Iridian Asset Management, managed by David Cohen and Harold Levy, holds the largest position in frontdoor, inc. (NASDAQ:FTDR). Iridian Asset Management has a $168.4 million position in the stock, comprising 2.4% of its 13F portfolio. The second most bullish fund manager is Engle Capital, managed by Jeffrey Hoffner, which holds a $62.3 million position; the fund has 14.8% of its 13F portfolio invested in the stock. Other members of the smart money that hold long positions consist of John Lykouretzos's Hoplite Capital Management, Richard Chilton's Chilton Investment Company and Peter S. Park's Park West Asset Management.
As aggregate interest increased, key money managers were breaking ground themselves. Iridian Asset Management, managed by David Cohen and Harold Levy, assembled the most outsized position in frontdoor, inc. (NASDAQ:FTDR). Iridian Asset Management had $168.4 million invested in the company at the end of the quarter. Richard Chilton's Chilton Investment Company also made a $46.3 million investment in the stock during the quarter. The other funds with brand new FTDR positions are Renaissance Technologies, Richard Scott Greeder's Broad Bay Capital, and Sander Gerber's Hudson Bay Capital Management.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as frontdoor, inc. (NASDAQ:FTDR) but similarly valued. These stocks are Bank OZK (NASDAQ:OZK), Eldorado Resorts Inc (NASDAQ:ERI), AutoNation, Inc. (NYSE:AN), and F.N.B. Corporation (NYSE:FNB). All of these stocks' market caps are similar to FTDR's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position OZK,21,285631,1 ERI,37,1022483,6 AN,22,402713,1 FNB,19,85551,-4 Average,24.75,449095,1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.75 hedge funds with bullish positions and the average amount invested in these stocks was $449 million. That figure was $739 million in FTDR's case. Eldorado Resorts Inc (NASDAQ:ERI) is the most popular stock in this table. On the other hand F.N.B. Corporation (NYSE:FNB) is the least popular one with only 19 bullish hedge fund positions. Compared to these stocks frontdoor, inc. (NASDAQ:FTDR) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Hedge funds were also right about betting on FTDR as the stock returned 11.5% during Q3 and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.