Amid an overall bull market, many stocks that smart money investors were collectively bullish on surged through the end of November. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 54% and 51% respectively. Our research shows that most of the stocks that smart money likes historically generate strong risk-adjusted returns. That's why we weren't surprised when hedge funds’ top 20 large-cap stock picks generated a return of 37.6% in 2019 (through the end of November) and outperformed the broader market benchmark by 9.9 percentage points.This is why following the smart money sentiment is a useful tool at identifying the next stock to invest in.
ING Groep N.V. (NYSE:ING) has seen an increase in hedge fund interest of late. ING was in 9 hedge funds' portfolios at the end of September. There were 8 hedge funds in our database with ING holdings at the end of the previous quarter. Our calculations also showed that ING isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the 21st century investor’s toolkit there are dozens of indicators stock market investors use to grade their holdings. A pair of the most useful indicators are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the best picks of the best fund managers can outperform their index-focused peers by a solid amount (see the details here).
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December we recommended Adams Energy based on an under-the-radar fund manager’s investor letter and the stock gained 20 percent. Let's take a glance at the key hedge fund action regarding ING Groep N.V. (NYSE:ING).
How are hedge funds trading ING Groep N.V. (NYSE:ING)?
At Q3's end, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards ING over the last 17 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Fisher Asset Management, managed by Ken Fisher, holds the most valuable position in ING Groep N.V. (NYSE:ING). Fisher Asset Management has a $514.1 million position in the stock, comprising 0.6% of its 13F portfolio. Sitting at the No. 2 spot is Orbis Investment Management, led by William B. Gray, holding a $17.8 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other members of the smart money that hold long positions include Renaissance Technologies, Ken Griffin's Citadel Investment Group and Israel Englander's Millennium Management. In terms of the portfolio weights assigned to each position Fisher Asset Management allocated the biggest weight to ING Groep N.V. (NYSE:ING), around 0.56% of its 13F portfolio. Orbis Investment Management is also relatively very bullish on the stock, dishing out 0.13 percent of its 13F equity portfolio to ING.
As aggregate interest increased, key hedge funds have been driving this bullishness. Renaissance Technologies, initiated the most outsized position in ING Groep N.V. (NYSE:ING). Renaissance Technologies had $6 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also made a $0.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Dmitry Balyasny's Balyasny Asset Management, Steve Cohen's Point72 Asset Management, and Mike Vranos's Ellington.
Let's now review hedge fund activity in other stocks similar to ING Groep N.V. (NYSE:ING). These stocks are Activision Blizzard, Inc. (NASDAQ:ATVI), Sempra Energy (NYSE:SRE), Marathon Petroleum Corp (NYSE:MPC), and Occidental Petroleum Corporation (NYSE:OXY). This group of stocks' market valuations are closest to ING's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ATVI,70,3014968,24 SRE,28,1270412,3 MPC,63,2858868,3 OXY,57,2774136,15 Average,54.5,2479596,11.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 54.5 hedge funds with bullish positions and the average amount invested in these stocks was $2480 million. That figure was $542 million in ING's case. Activision Blizzard, Inc. (NASDAQ:ATVI) is the most popular stock in this table. On the other hand Sempra Energy (NYSE:SRE) is the least popular one with only 28 bullish hedge fund positions. Compared to these stocks ING Groep N.V. (NYSE:ING) is even less popular than SRE. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on ING, though not to the same extent, as the stock returned 10.2% during the fourth quarter (through 11/30) and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.