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Is Raymond James Financial, Inc. (NYSE:RJF) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Raymond James Financial, Inc. (NYSE:RJF) was in 33 hedge funds' portfolios at the end of March. The all time high for this statistic is 35. RJF investors should be aware of a decrease in support from the world's most elite money managers lately. There were 34 hedge funds in our database with RJF holdings at the end of December. Our calculations also showed that RJF isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Glenn Greenberg of Brave Warrior Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV 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. With all of this in mind let's take a look at the key hedge fund action regarding Raymond James Financial, Inc. (NYSE:RJF).
Do Hedge Funds Think RJF Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 33 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -3% from the fourth quarter of 2020. On the other hand, there were a total of 31 hedge funds with a bullish position in RJF a year ago. With the smart money's sentiment swirling, there exists a few notable hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Glenn Greenberg's Brave Warrior Capital has the most valuable position in Raymond James Financial, Inc. (NYSE:RJF), worth close to $250.6 million, amounting to 8.2% of its total 13F portfolio. The second most bullish fund manager is Fisher Asset Management, led by Ken Fisher, holding a $101.9 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining members of the smart money that are bullish encompass Ken Griffin's Citadel Investment Group, John Smith Clark's Southpoint Capital Advisors and Brandon Haley's Holocene Advisors. In terms of the portfolio weights assigned to each position Brave Warrior Capital allocated the biggest weight to Raymond James Financial, Inc. (NYSE:RJF), around 8.18% of its 13F portfolio. Gillson Capital is also relatively very bullish on the stock, dishing out 2.38 percent of its 13F equity portfolio to RJF.
Due to the fact that Raymond James Financial, Inc. (NYSE:RJF) has witnessed declining sentiment from hedge fund managers, logic holds that there is a sect of hedgies who were dropping their positions entirely heading into Q2. At the top of the heap, Dmitry Balyasny's Balyasny Asset Management dropped the largest stake of all the hedgies followed by Insider Monkey, valued at an estimated $30.1 million in stock. Ravi Chopra's fund, Azora Capital, also said goodbye to its stock, about $21.3 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 1 funds heading into Q2.
Let's go over hedge fund activity in other stocks similar to Raymond James Financial, Inc. (NYSE:RJF). These stocks are Ally Financial Inc (NYSE:ALLY), Viatris Inc. (NASDAQ:VTRS), Tradeweb Markets Inc. (NASDAQ:TW), Qualtrics International Inc. (NASDAQ:XM), Jacobs Engineering Group Inc. (NYSE:J), Avantor, Inc. (NYSE:AVTR), and QuantumScape Corporation (NYSE:QS). This group of stocks' market caps resemble RJF's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ALLY,51,2804131,-6 VTRS,58,1825444,-9 TW,26,311809,-5 XM,37,1247053,37 J,24,995619,-6 AVTR,48,2064929,-8 QS,29,534668,-6 Average,39,1397665,-0.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 39 hedge funds with bullish positions and the average amount invested in these stocks was $1398 million. That figure was $749 million in RJF's case. Viatris Inc. (NASDAQ:VTRS) is the most popular stock in this table. On the other hand Jacobs Engineering Group Inc. (NYSE:J) is the least popular one with only 24 bullish hedge fund positions. Raymond James Financial, Inc. (NYSE:RJF) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for RJF is 45.5. 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 22.8% in 2021 through July 2nd and surpassed the market again by 6 percentage points. Unfortunately RJF wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); RJF investors were disappointed as the stock returned 7.7% since the end of March (through 7/2) 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.