- Oops!Something went wrong.Please try again later.
- Oops!Something went wrong.Please try again later.
We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn't mean that they don't have occasional colossal losses; they do (like Melvin Capital's recent GameStop losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Synovus Financial Corp. (NYSE:SNV).
Is SNV stock a buy? Synovus Financial Corp. (NYSE:SNV) has seen an increase in enthusiasm from smart money recently. Synovus Financial Corp. (NYSE:SNV) was in 33 hedge funds' portfolios at the end of December. The all time high for this statistic is 41. Our calculations also showed that SNV isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 197% since March 2017 and outperformed the S&P 500 ETFs by more than 124 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Sander Gerber of Hudson Bay Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 10 best battery stocks to buy to identify the next stock with 10x upside potential. 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 website. Now we're going to take a glance at the recent hedge fund action regarding Synovus Financial Corp. (NYSE:SNV).
Do Hedge Funds Think SNV Is A Good Stock To Buy Now?
At the end of December, a total of 33 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 32% from the third quarter of 2020. On the other hand, there were a total of 35 hedge funds with a bullish position in SNV a year ago. So, let's examine 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, Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, holds the number one position in Synovus Financial Corp. (NYSE:SNV). Arrowstreet Capital has a $18.4 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by GAMCO Investors, led by Mario Gabelli, holding a $13.4 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that hold long positions consist of Gregg J. Powers's Private Capital Management, Mark Lee's Forest Hill Capital and Daniel Johnson's Gillson Capital. In terms of the portfolio weights assigned to each position Forest Hill Capital allocated the biggest weight to Synovus Financial Corp. (NYSE:SNV), around 4.41% of its 13F portfolio. Private Capital Management is also relatively very bullish on the stock, earmarking 2.43 percent of its 13F equity portfolio to SNV.
As aggregate interest increased, some big names have jumped into Synovus Financial Corp. (NYSE:SNV) headfirst. Balyasny Asset Management, managed by Dmitry Balyasny, established the largest position in Synovus Financial Corp. (NYSE:SNV). Balyasny Asset Management had $6 million invested in the company at the end of the quarter. Sander Gerber's Hudson Bay Capital Management also made a $4.5 million investment in the stock during the quarter. The other funds with brand new SNV positions are John D. Gillespie's Prospector Partners, Qing Li's Sciencast Management, and Ray Dalio's Bridgewater Associates.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Synovus Financial Corp. (NYSE:SNV) but similarly valued. We will take a look at Pilgrim's Pride Corporation (NASDAQ:PPC), Penske Automotive Group, Inc. (NYSE:PAG), Builders FirstSource, Inc. (NASDAQ:BLDR), Cirrus Logic, Inc. (NASDAQ:CRUS), Bloom Energy Corporation (NYSE:BE), Qualys Inc (NASDAQ:QLYS), and PennyMac Financial Services Inc (NYSE:PFSI). This group of stocks' market values match SNV's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PPC,17,80484,-1 PAG,21,114199,3 BLDR,37,755250,-1 CRUS,28,472627,2 BE,19,169159,2 QLYS,22,252086,3 PFSI,29,536125,-2 Average,24.7,339990,0.9 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.7 hedge funds with bullish positions and the average amount invested in these stocks was $340 million. That figure was $157 million in SNV's case. Builders FirstSource, Inc. (NASDAQ:BLDR) is the most popular stock in this table. On the other hand Pilgrim's Pride Corporation (NASDAQ:PPC) is the least popular one with only 17 bullish hedge fund positions. Synovus Financial Corp. (NYSE:SNV) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SNV is 74.1. 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 7.9% in 2021 through April 1st and still beat the market by 0.4 percentage points. Hedge funds were also right about betting on SNV as the stock returned 43.7% since the end of Q4 (through 4/1) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Get real-time email alerts: Follow Synovus Financial Corp (NYSE:SNV)
Disclosure: None. This article was originally published at Insider Monkey.