Is Metlife Inc (MET) Going to Burn These Hedge Funds?
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. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of March 31st, a week after the market trough. In this article we look at what those investors think of Metlife Inc (NYSE:MET).
Metlife Inc (NYSE:MET) has experienced a decrease in activity from the world's largest hedge funds recently. Our calculations also showed that MET 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.
At the moment there are a lot of methods investors use to appraise their stock investments. Some of the most underrated methods are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the best picks of the best money managers can beat the market by a superb margin (see the details here).
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Ric Dillon of Diamond Hill Capital[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020's unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. 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 let's take a peek at the latest hedge fund action regarding Metlife Inc (NYSE:MET).
How have hedgies been trading Metlife Inc (NYSE:MET)?
At Q1's end, a total of 34 of the hedge funds tracked by Insider Monkey were long this stock, a change of -11% from the previous quarter. On the other hand, there were a total of 31 hedge funds with a bullish position in MET a year ago. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Diamond Hill Capital held the most valuable stake in Metlife Inc (NYSE:MET), which was worth $305.4 million at the end of the third quarter. On the second spot was Pzena Investment Management which amassed $190.4 million worth of shares. AQR Capital Management, Citadel Investment Group, and Arrowstreet Capital 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 Diamond Hill Capital allocated the biggest weight to Metlife Inc (NYSE:MET), around 2.07% of its 13F portfolio. Redwood Capital Management is also relatively very bullish on the stock, dishing out 1.54 percent of its 13F equity portfolio to MET.
Judging by the fact that Metlife Inc (NYSE:MET) has witnessed falling interest from hedge fund managers, it's safe to say that there were a few funds that decided to sell off their positions entirely in the third quarter. Intriguingly, Andreas Halvorsen's Viking Global sold off the largest stake of the 750 funds tracked by Insider Monkey, worth an estimated $342.7 million in stock, and Dmitry Balyasny's Balyasny Asset Management was right behind this move, as the fund dumped about $72.5 million worth. These transactions are intriguing to say the least, as total hedge fund interest dropped by 4 funds in the third quarter.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Metlife Inc (NYSE:MET) but similarly valued. These stocks are WEC Energy Group, Inc. (NYSE:WEC), The Hershey Company (NYSE:HSY), Chunghwa Telecom Co., Ltd (NYSE:CHT), and ICICI Bank Limited (NYSE:IBN). This group of stocks' market caps are similar to MET's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position WEC,29,267388,14 HSY,33,958331,-6 CHT,6,123577,2 IBN,24,378931,-5 Average,23,432057,1.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $432 million. That figure was $1018 million in MET's case. The Hershey Company (NYSE:HSY) is the most popular stock in this table. On the other hand Chunghwa Telecom Co., Ltd (NYSE:CHT) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Metlife Inc (NYSE:MET) is more popular among hedge funds. 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 8.3% in 2020 through the end of May but still managed to beat the market by 13.2 percentage points. Hedge funds were also right about betting on MET, though not to the same extent, as the stock returned 19.5% in Q2 (through the end of May) and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.
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