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Is Huntington Bancshares Incorporated (HBAN) Going to Burn These Hedge Funds?

·5 min read

Is Huntington Bancshares Incorporated (NASDAQ:HBAN) 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.

Huntington Bancshares Incorporated (NASDAQ:HBAN) investors should be aware of an increase in hedge fund interest of late. Huntington Bancshares Incorporated (NASDAQ:HBAN) was in 33 hedge funds' portfolios at the end of June. The all time high for this statistic is 40. Our calculations also showed that HBAN isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).

Today there are a multitude of indicators stock traders can use to size up stocks. A couple of the most underrated indicators are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the best hedge fund managers can outclass the broader indices by a healthy margin (see the details here). Also, our monthly newsletter's portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.

Ryan Tolkin, CIO of Schonfeld Strategic Advisors

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. Keeping this in mind let's check out the key hedge fund action encompassing Huntington Bancshares Incorporated (NASDAQ:HBAN).

Do Hedge Funds Think HBAN Is A Good Stock To Buy Now?

At the end of the second quarter, a total of 33 of the hedge funds tracked by Insider Monkey were long this stock, a change of 22% from one quarter earlier. On the other hand, there were a total of 30 hedge funds with a bullish position in HBAN a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Citadel Investment Group held the most valuable stake in Huntington Bancshares Incorporated (NASDAQ:HBAN), which was worth $171.4 million at the end of the second quarter. On the second spot was Millennium Management which amassed $56.5 million worth of shares. Pzena Investment Management, Adage Capital Management, and Schonfeld Strategic Advisors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Prana Capital Management allocated the biggest weight to Huntington Bancshares Incorporated (NASDAQ:HBAN), around 1.25% of its 13F portfolio. Schonfeld Strategic Advisors is also relatively very bullish on the stock, setting aside 0.22 percent of its 13F equity portfolio to HBAN.

As one would reasonably expect, key money managers were breaking ground themselves. Pzena Investment Management, managed by Richard S. Pzena, created the most valuable position in Huntington Bancshares Incorporated (NASDAQ:HBAN). Pzena Investment Management had $48.1 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace's Marshall Wace LLP also initiated a $8.6 million position during the quarter. The other funds with brand new HBAN positions are Richard SchimeláandáLawrence Sapanski's Cinctive Capital Management, Marc Lisker, Glenn Fuhrman and John Phelan's MSDC Management, and D. E. Shaw's D E Shaw.

Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Huntington Bancshares Incorporated (NASDAQ:HBAN) but similarly valued. These stocks are Horizon Therapeutics Public Limited Company (NASDAQ:HZNP), CarMax Inc (NYSE:KMX), TransUnion (NYSE:TRU), DraftKings Inc. (NASDAQ:DKNG), MGM Resorts International (NYSE:MGM), Church & Dwight Co., Inc. (NYSE:CHD), and Gartner Inc (NYSE:IT). This group of stocks' market values are closest to HBAN's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position HZNP,56,4325284,8 KMX,39,1619512,-7 TRU,35,2609504,-6 DKNG,26,927908,-17 MGM,59,2889161,2 CHD,35,1383073,8 IT,39,1988886,-1 Average,41.3,2249047,-1.9 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 41.3 hedge funds with bullish positions and the average amount invested in these stocks was $2249 million. That figure was $443 million in HBAN's case. MGM Resorts International (NYSE:MGM) is the most popular stock in this table. On the other hand DraftKings Inc. (NASDAQ:DKNG) is the least popular one with only 26 bullish hedge fund positions. Huntington Bancshares Incorporated (NASDAQ:HBAN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for HBAN is 45.4. 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. 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 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. A small number of hedge funds were also right about betting on HBAN as the stock returned 14.2% since the end of the second quarter (through 10/15) and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.