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. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. What do these smart investors think about Suzano S.A. (NYSE:SUZ)?
Suzano S.A. (NYSE:SUZ) investors should be aware of a decrease in activity from the world's largest hedge funds lately. SUZ was in 3 hedge funds' portfolios at the end of March. There were 4 hedge funds in our database with SUZ holdings at the end of the previous quarter. Our calculations also showed that SUZ isn't among the 30 most popular stocks among hedge funds (click for Q1 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.
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 44 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_746893" align="aligncenter" width="397"] Paul Marshall of Marshall Wace[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we're going to go over the latest hedge fund action encompassing Suzano S.A. (NYSE:SUZ).
What have hedge funds been doing with Suzano S.A. (NYSE:SUZ)?
Heading into the second quarter of 2020, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -25% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in SUZ over the last 18 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey's hedge fund database, Renaissance Technologies has the largest position in Suzano S.A. (NYSE:SUZ), worth close to $26.6 million, comprising less than 0.1%% of its total 13F portfolio. The second most bullish fund manager is Cliff Asness of AQR Capital Management, with a $0.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. In terms of the portfolio weights assigned to each position Renaissance Technologies allocated the biggest weight to Suzano S.A. (NYSE:SUZ), around 0.03% of its 13F portfolio. Marshall Wace LLP is also relatively very bullish on the stock, earmarking 0.0026 percent of its 13F equity portfolio to SUZ.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Citadel Investment Group. One hedge fund selling its entire position doesn't always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don't think this is the case in this case because none of the 750+ hedge funds tracked by Insider Monkey identified SUZ as a viable investment and initiated a position in the stock.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Suzano S.A. (NYSE:SUZ) but similarly valued. We will take a look at Hologic, Inc. (NASDAQ:HOLX), Wabtec Corporation (NYSE:WAB), Enel Americas S.A. (NYSE:ENIA), and NetApp Inc. (NASDAQ:NTAP). All of these stocks' market caps are similar to SUZ's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position HOLX,41,866159,0 WAB,41,1405445,0 ENIA,7,102191,-1 NTAP,26,335752,-1 Average,28.75,677387,-0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.75 hedge funds with bullish positions and the average amount invested in these stocks was $677 million. That figure was $27 million in SUZ's case. Hologic, Inc. (NASDAQ:HOLX) is the most popular stock in this table. On the other hand Enel Americas S.A. (NYSE:ENIA) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Suzano S.A. (NYSE:SUZ) is even less popular than ENIA. Hedge funds dodged a bullet by taking a bearish stance towards SUZ. 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 7.9% in 2020 through May 22nd but managed to beat the market by 15.6 percentage points. Unfortunately SUZ wasn't nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); SUZ investors were disappointed as the stock returned 0.7% during the second quarter (through May 22nd) 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.
Disclosure: None. This article was originally published at Insider Monkey.