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After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of March 31st. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Credicorp Ltd. (NYSE:BAP).
Credicorp Ltd. (NYSE:BAP) was in 22 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 28. BAP shareholders have witnessed an increase in hedge fund interest lately. There were 15 hedge funds in our database with BAP positions at the end of the fourth quarter. Our calculations also showed that BAP isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Alex Litowitz of Magnetar Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Now let's take a gander at the key hedge fund action encompassing Credicorp Ltd. (NYSE:BAP).
Do Hedge Funds Think BAP Is A Good Stock To Buy Now?
At first quarter's end, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 47% from the previous quarter. By comparison, 22 hedge funds held shares or bullish call options in BAP a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
The largest stake in Credicorp Ltd. (NYSE:BAP) was held by Fisher Asset Management, which reported holding $79.5 million worth of stock at the end of December. It was followed by Ariel Investments with a $51.3 million position. Other investors bullish on the company included Renaissance Technologies, AQR Capital Management, and Hosking Partners. In terms of the portfolio weights assigned to each position Quantamental Technologies allocated the biggest weight to Credicorp Ltd. (NYSE:BAP), around 0.76% of its 13F portfolio. Ariel Investments is also relatively very bullish on the stock, setting aside 0.51 percent of its 13F equity portfolio to BAP.
As one would reasonably expect, key hedge funds have been driving this bullishness. Millennium Management, managed by Israel Englander, assembled the most outsized position in Credicorp Ltd. (NYSE:BAP). Millennium Management had $8.8 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital also initiated a $3.5 million position during the quarter. The following funds were also among the new BAP investors: Donald Sussman's Paloma Partners, Alec Litowitz and Ross Laser's Magnetar Capital, and Greg Eisner's Engineers Gate Manager.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Credicorp Ltd. (NYSE:BAP) but similarly valued. We will take a look at AGCO Corporation (NYSE:AGCO), Ozon Holdings PLC (NASDAQ:OZON), Steel Dynamics, Inc. (NASDAQ:STLD), Five Below Inc (NASDAQ:FIVE), Iron Mountain Incorporated (NYSE:IRM), Repligen Corporation (NASDAQ:RGEN), and Trex Company, Inc. (NYSE:TREX). This group of stocks' market caps resemble BAP's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AGCO,36,552596,-4 OZON,17,136135,-4 STLD,26,570961,-1 FIVE,43,1010018,1 IRM,16,56371,-2 RGEN,38,1039405,1 TREX,23,203682,-7 Average,28.4,509881,-2.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.4 hedge funds with bullish positions and the average amount invested in these stocks was $510 million. That figure was $236 million in BAP's case. Five Below Inc (NASDAQ:FIVE) is the most popular stock in this table. On the other hand Iron Mountain Incorporated (NYSE:IRM) is the least popular one with only 16 bullish hedge fund positions. Credicorp Ltd. (NYSE:BAP) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BAP is 44.7. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and surpassed the market again by 7.7 percentage points. Unfortunately BAP wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); BAP investors were disappointed as the stock returned -13% since the end of March (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.