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In this article you are going to find out whether hedge funds think Intuit Inc. (NASDAQ:INTU) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It's not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Intuit Inc. (NASDAQ:INTU) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 68 hedge funds' portfolios at the end of March. Our calculations also showed that INTU isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as Lockheed Martin Corporation (NYSE:LMT), Square, Inc. (NYSE:SQ), and Uber Technologies, Inc. (NYSE:UBER) to gather more data points.
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Dan Loeb of Third Point
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Do Hedge Funds Think INTU Is A Good Stock To Buy Now?
At Q1's end, a total of 68 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 54 hedge funds with a bullish position in INTU 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.
The largest stake in Intuit Inc. (NASDAQ:INTU) was held by Fundsmith LLP, which reported holding $1753.4 million worth of stock at the end of December. It was followed by Third Point with a $459.7 million position. Other investors bullish on the company included AQR Capital Management, Foxhaven Asset Management, and GLG Partners. In terms of the portfolio weights assigned to each position Blue Whale Capital allocated the biggest weight to Intuit Inc. (NASDAQ:INTU), around 6.34% of its 13F portfolio. Foxhaven Asset Management is also relatively very bullish on the stock, designating 6.3 percent of its 13F equity portfolio to INTU.
Due to the fact that Intuit Inc. (NASDAQ:INTU) has faced declining sentiment from the aggregate hedge fund industry, logic holds that there was a specific group of funds that elected to cut their positions entirely by the end of the first quarter. Interestingly, Barry Dargan's Intermede Investment Partners said goodbye to the biggest stake of the 750 funds tracked by Insider Monkey, valued at an estimated $106.6 million in stock, and Frank Fu's CaaS Capital was right behind this move, as the fund cut about $10 million worth. These transactions are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Intuit Inc. (NASDAQ:INTU) but similarly valued. We will take a look at Lockheed Martin Corporation (NYSE:LMT), Square, Inc. (NYSE:SQ), Uber Technologies, Inc. (NYSE:UBER), Target Corporation (NYSE:TGT), Micron Technology, Inc. (NASDAQ:MU), CVS Health Corporation (NYSE:CVS), and ServiceNow Inc (NYSE:NOW). All of these stocks' market caps are similar to INTU's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LMT,50,2295448,-3 SQ,92,9202246,3 UBER,130,10532866,-5 TGT,60,4760942,-18 MU,100,7621579,0 CVS,62,1315655,6 NOW,98,6127672,2 Average,84.6,5979487,-2.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 84.6 hedge funds with bullish positions and the average amount invested in these stocks was $5979 million. That figure was $4708 million in INTU's case. Uber Technologies, Inc. (NYSE:UBER) is the most popular stock in this table. On the other hand Lockheed Martin Corporation (NYSE:LMT) is the least popular one with only 50 bullish hedge fund positions. Intuit Inc. (NASDAQ:INTU) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for INTU is 46.3. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. A small number of hedge funds were also right about betting on INTU as the stock returned 23.4% since the end of the first quarter (through 6/11) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.