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Where Do Hedge Funds Stand On Fidelity National Information Services Inc. (FIS)?

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Reymerlyn Martin
·6 min read
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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 817 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 September 30th, about a month before the elections. In this article we look at what those investors think of Fidelity National Information Services Inc. (NYSE:FIS).

Fidelity National Information Services Inc. (NYSE:FIS) has seen a decrease in hedge fund interest recently. Fidelity National Information Services Inc. (NYSE:FIS) was in 88 hedge funds' portfolios at the end of September. The all time high for this statistics is 111. Our calculations also showed that FIS ranked 29th among the 30 most popular stocks among hedge funds (click for Q3 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.

If you'd ask most investors, hedge funds are assumed to be worthless, outdated investment vehicles of yesteryear. While there are greater than 8000 funds in operation at the moment, Our researchers hone in on the elite of this club, around 850 funds. Most estimates calculate that this group of people shepherd the majority of the hedge fund industry's total capital, and by monitoring their highest performing stock picks, Insider Monkey has unsheathed various investment strategies that have historically outpaced the broader indices. Insider Monkey's flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .

Jeffrey Tannenbaum of Fir Tree

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets. Tesla's stock price skyrocketed, yet lithium prices are still below their 2019 highs. So, we are checking out this lithium stock right now. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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. Keeping this in mind let's check out the fresh hedge fund action regarding Fidelity National Information Services Inc. (NYSE:FIS).

What have hedge funds been doing with Fidelity National Information Services Inc. (NYSE:FIS)?

At the end of September, a total of 88 of the hedge funds tracked by Insider Monkey were long this stock, a change of -21% from the previous quarter. On the other hand, there were a total of 95 hedge funds with a bullish position in FIS a year ago. With the smart money's positions undergoing their usual ebb and flow, there exists an "upper tier" of noteworthy hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Andreas Halvorsen's Viking Global has the most valuable position in Fidelity National Information Services Inc. (NYSE:FIS), worth close to $1.3082 billion, accounting for 4.7% of its total 13F portfolio. On Viking Global's heels is Select Equity Group, led by Robert Joseph Caruso, holding a $640.2 million position; the fund has 3.1% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that hold long positions include William von Mueffling's Cantillon Capital Management, Dan Loeb's Third Point and Farallon Capital. In terms of the portfolio weights assigned to each position Atalan Capital allocated the biggest weight to Fidelity National Information Services Inc. (NYSE:FIS), around 11.05% of its 13F portfolio. Park Presidio Capital is also relatively very bullish on the stock, designating 9.17 percent of its 13F equity portfolio to FIS.

Because Fidelity National Information Services Inc. (NYSE:FIS) has faced bearish sentiment from the aggregate hedge fund industry, we can see that there were a few hedgies that decided to sell off their entire stakes in the third quarter. Intriguingly, Gabriel Plotkin's Melvin Capital Management dumped the largest position of the 750 funds monitored by Insider Monkey, worth about $334.3 million in stock, and Doug Silverman and Alexander Klabin's Senator Investment Group was right behind this move, as the fund said goodbye to about $107.3 million worth. These transactions are interesting, as aggregate hedge fund interest fell by 23 funds in the third quarter.

Let's now take a look at hedge fund activity in other stocks similar to Fidelity National Information Services Inc. (NYSE:FIS). We will take a look at TOTAL SE (NYSE:TOT), Citigroup Inc. (NYSE:C), Pinduoduo Inc. (NASDAQ:PDD), Raytheon Technologies Corp (NYSE:RTX), S&P Global Inc. (NYSE:SPGI), BlackRock, Inc. (NYSE:BLK), and Intuit Inc. (NASDAQ:INTU). This group of stocks' market values resemble FIS's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TOT,18,639601,-1 C,91,5545152,-5 PDD,34,4331330,4 RTX,55,2988856,-4 SPGI,71,3030583,0 BLK,39,922746,2 INTU,54,1822831,1 Average,51.7,2754443,-0.4 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 51.7 hedge funds with bullish positions and the average amount invested in these stocks was $2754 million. That figure was $7941 million in FIS's case. Citigroup Inc. (NYSE:C) is the most popular stock in this table. On the other hand TOTAL SE (NYSE:TOT) is the least popular one with only 18 bullish hedge fund positions. Fidelity National Information Services Inc. (NYSE:FIS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FIS is 53.7. 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. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 28.1% in 2020 through November 23rd and beat the market again by 15.4 percentage points. Unfortunately FIS wasn't nearly as popular as these 20 stocks and hedge funds that were betting on FIS were disappointed as the stock returned -1.3% since the end of September (through 11/23) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.

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Disclosure: None. This article was originally published at Insider Monkey.

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