At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Fulton Financial Corp (NASDAQ:FULT).
Hedge fund interest in Fulton Financial Corp (NASDAQ:FULT) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare FULT to other stocks including Eidos Therapeutics, Inc. (NASDAQ:EIDX), AMTD International Inc. (NYSE:HKIB), and CommVault Systems, Inc. (NASDAQ:CVLT) to get a better sense of its popularity. Video: Watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most traders, hedge funds are assumed to be slow, outdated investment vehicles of the past. While there are over 8000 funds with their doors open at present, Our experts choose to focus on the masters of this club, approximately 850 funds. Most estimates calculate that this group of people direct most of the smart money's total capital, and by tracking their top equity investments, Insider Monkey has uncovered a number of investment strategies that have historically surpassed the S&P 500 index. Insider Monkey's flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points a year 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 .
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, blockchain technology's influence will go beyond online payments. So, we are checking out this futurist's moonshot opportunities in tech stocks. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we're going to review the key hedge fund action encompassing Fulton Financial Corp (NASDAQ:FULT).
What does smart money think about Fulton Financial Corp (NASDAQ:FULT)?
At the end of the first quarter, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 16 hedge funds with a bullish position in FULT a year ago. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
The largest stake in Fulton Financial Corp (NASDAQ:FULT) was held by Winton Capital Management, which reported holding $3.2 million worth of stock at the end of September. It was followed by Holocene Advisors with a $2.1 million position. Other investors bullish on the company included Citadel Investment Group, AQR Capital Management, and Gardner Russo & Gardner. In terms of the portfolio weights assigned to each position Winton Capital Management allocated the biggest weight to Fulton Financial Corp (NASDAQ:FULT), around 0.09% of its 13F portfolio. Neo Ivy Capital is also relatively very bullish on the stock, earmarking 0.06 percent of its 13F equity portfolio to FULT.
Judging by the fact that Fulton Financial Corp (NASDAQ:FULT) has witnessed falling interest from the entirety of the hedge funds we track, it's safe to say that there exists a select few hedge funds who were dropping their full holdings last quarter. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital dumped the biggest investment of the 750 funds followed by Insider Monkey, valued at about $8 million in stock, and Noam Gottesman's GLG Partners was right behind this move, as the fund sold off about $2.1 million worth. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Fulton Financial Corp (NASDAQ:FULT) but similarly valued. We will take a look at Eidos Therapeutics, Inc. (NASDAQ:EIDX), AMTD International Inc. (NYSE:HKIB), CommVault Systems, Inc. (NASDAQ:CVLT), and Wintrust Financial Corporation (NASDAQ:WTFC). This group of stocks' market valuations are similar to FULT's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position EIDX,12,271572,-8 HKIB,1,15174,0 CVLT,18,463730,-15 WTFC,27,152618,6 Average,14.5,225774,-4.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.5 hedge funds with bullish positions and the average amount invested in these stocks was $226 million. That figure was $13 million in FULT's case. Wintrust Financial Corporation (NASDAQ:WTFC) is the most popular stock in this table. On the other hand AMTD International Inc. (NYSE:HKIB) is the least popular one with only 1 bullish hedge fund positions. Fulton Financial Corp (NASDAQ:FULT) 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 13.3% in 2020 through June 25th and surpassed the market by 16.8 percentage points. Unfortunately FULT wasn't nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); FULT investors were disappointed as the stock returned -8.4% 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.
Disclosure: None. This article was originally published at Insider Monkey.