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In this article we are going to use hedge fund sentiment as a tool and determine whether The Interpublic Group of Companies Inc (NYSE:IPG) is a good investment right now. We like to analyze hedge fund sentiment before conducting days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds' picks don't beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
Is IPG stock a buy or sell? Prominent investors were turning bullish. The number of long hedge fund bets improved by 7 lately. The Interpublic Group of Companies Inc (NYSE:IPG) was in 38 hedge funds' portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 37. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that IPG isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings). There were 31 hedge funds in our database with IPG positions at the end of the third quarter.
Mario Gabelli of GAMCO Investors
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Do Hedge Funds Think IPG Is A Good Stock To Buy Now?
At the end of December, a total of 38 of the hedge funds tracked by Insider Monkey were long this stock, a change of 23% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in IPG over the last 22 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Ariel Investments, managed by John W. Rogers, holds the most valuable position in The Interpublic Group of Companies Inc (NYSE:IPG). Ariel Investments has a $229.1 million position in the stock, comprising 2.6% of its 13F portfolio. The second largest stake is held by AQR Capital Management, managed by Cliff Asness, which holds a $106.7 million position; 0.2% of its 13F portfolio is allocated to the stock. Other members of the smart money that are bullish include Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, Mario Gabelli's GAMCO Investors and Phill Gross and Robert Atchinson's Adage Capital Management. In terms of the portfolio weights assigned to each position Ariel Investments allocated the biggest weight to The Interpublic Group of Companies Inc (NYSE:IPG), around 2.58% of its 13F portfolio. Zeno Research is also relatively very bullish on the stock, dishing out 2.02 percent of its 13F equity portfolio to IPG.
Consequently, specific money managers have been driving this bullishness. Renaissance Technologies, assembled the biggest position in The Interpublic Group of Companies Inc (NYSE:IPG). Renaissance Technologies had $7.4 million invested in the company at the end of the quarter. Vikas Lunia's Lunia Capital also made a $4.3 million investment in the stock during the quarter. The other funds with brand new IPG positions are Clint Carlson's Carlson Capital, Felix Wai's Zeno Research, and Michael Rockefeller and Karl Kroeker's Woodline Partners.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as The Interpublic Group of Companies Inc (NYSE:IPG) but similarly valued. These stocks are NRG Energy Inc (NYSE:NRG), Bunge Limited (NYSE:BG), Ultragenyx Pharmaceutical Inc (NASDAQ:RARE), RH (NYSE:RH), Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF), Shaw Communications Inc (NYSE:SJR), and The Western Union Company (NYSE:WU). This group of stocks' market caps are closest to IPG's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NRG,31,1465420,-1 BG,51,936635,10 RARE,26,609331,6 RH,42,1925993,2 KOF,6,384456,0 SJR,19,143455,6 WU,29,491046,-7 Average,29.1,850905,2.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.1 hedge funds with bullish positions and the average amount invested in these stocks was $851 million. That figure was $582 million in IPG's case. Bunge Limited (NYSE:BG) is the most popular stock in this table. On the other hand Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) is the least popular one with only 6 bullish hedge fund positions. The Interpublic Group of Companies Inc (NYSE:IPG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for IPG is 75.6. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 5.3% in 2021 through March 19th and still beat the market by 0.8 percentage points. Hedge funds were also right about betting on IPG as the stock returned 27.1% since the end of Q4 (through 3/19) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
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