Visa Inc (NYSE:V) has experienced an increase in activity from the world's largest hedge funds of late. Our calculations also showed that V is also among the 30 most popular stocks among hedge funds and hedge fund sentiment towards the stock is at an all time high.
This is usually a very bullish signal. For example hedge fund sentiment in Xilinx Inc. (XLNX) was also at its all time high at the beginning of this year and the stock returned more than 46% in 2.5 months. We observed a similar performance from Progressive Corporation (PGR) which returned 27% and outperformed the SPY by nearly 14 percentage points in 2.5 months. Hedge fund sentiment towards IQVIA Holdings Inc. (IQV), Brookfield Asset Management Inc. (BAM), Atlassian Corporation Plc (TEAM), RCL, and CRH hit all time hedge fund sentiment highs at the end of December, and all of these stocks returned more than 20% in the first 2.5 months of this year.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'd significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.5% through March 12, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let's take a glance at the key hedge fund action regarding Visa Inc (NYSE:V).
Hedge fund activity in Visa Inc (NYSE:V)
At the end of the fourth quarter, a total of 128 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 14% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards V over the last 14 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Fisher Asset Management held the most valuable stake in Visa Inc (NYSE:V), which was worth $2457 million at the end of the third quarter. On the second spot was Berkshire Hathaway which amassed $1393.6 million worth of shares. Moreover, Viking Global, Arrowstreet Capital, and Akre Capital Management were also bullish on Visa Inc (NYSE:V), allocating a large percentage of their portfolios to this stock.
As one would reasonably expect, specific money managers were leading the bulls' herd. Renaissance Technologies, managed by Jim Simons, established the most valuable position in Visa Inc (NYSE:V). Renaissance Technologies had $219.7 million invested in the company at the end of the quarter. Doug Silverman and Alexander Klabin's Senator Investment Group also initiated a $164.9 million position during the quarter. The other funds with brand new V positions in our database are Snehal Amin's Windacre Partnership, Daniel Sundheim's D1 Capital Partners, and Steve Cohen's Point72 Asset Management.
Let's also examine hedge fund activity in other stocks similar to Visa Inc (NYSE:V). These stocks are Exxon Mobil Corporation (NYSE:XOM), Walmart Inc. (NYSE:WMT), Nestle SA (OTCMKTS:NSRGY), and Royal Dutch Shell plc (NYSE:RDS). This group of stocks' market caps are closest to V's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position XOM,53,1613920,0 WMT,63,4444246,3 NSRGY,4,1502328,-1 RDS,33,1619869,-3 Average,38.25,2295091,-0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 38.25 hedge funds with bullish positions and the average amount invested in these stocks was $2295 million. That figure was $13067 million in V's case. Walmart Inc. (NYSE:WMT) is the most popular stock in this table. On the other hand Nestle SA (OTCMKTS:NSRGY) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Visa Inc (NYSE:V) is more popular among hedge funds. It is also one of the 15 most popular stocks among hedge funds. Our calculations showed that top 15 most popular stocks among hedge funds returned 19.7% through March 15th and outperformed the iShares Core S&P 500 ETF (IVV) by 6.6 percentage points. Hedge funds were also right about betting on Visa as the stock returned 18% and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.