The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 867 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, when the S&P 500 Index was trading around the 4300 level. Since then investors decided to bet on the economic recovery and a stock market rebound even though we experienced a temporary correction in January. In this article you are going to find out whether hedge funds thought KeyCorp (NYSE:KEY) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.
Is KeyCorp (NYSE:KEY) the right pick for your portfolio? The smart money was cutting their exposure. The number of bullish hedge fund positions were trimmed by 4 lately. KeyCorp (NYSE:KEY) was in 36 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 46. Our calculations also showed that KEY isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 40 hedge funds in our database with KEY positions at the end of the second quarter.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind we’re going to go over the key hedge fund action surrounding KeyCorp (NYSE:KEY).
David Harding of Winton Capital Management
Do Hedge Funds Think KEY Is A Good Stock To Buy Now?
At Q3’s end, a total of 36 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -10% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards KEY over the last 25 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.
The largest stake in KeyCorp (NYSE:KEY) was held by Balyasny Asset Management, which reported holding $128.2 million worth of stock at the end of September. It was followed by Pzena Investment Management with a $64.2 million position. Other investors bullish on the company included Adage Capital Management, Citadel Investment Group, and Prospector Partners. In terms of the portfolio weights assigned to each position Prospector Partners allocated the biggest weight to KeyCorp (NYSE:KEY), around 2.56% of its 13F portfolio. Full18 Capital is also relatively very bullish on the stock, dishing out 1.86 percent of its 13F equity portfolio to KEY.
Since KeyCorp (NYSE:KEY) has witnessed bearish sentiment from the aggregate hedge fund industry, we can see that there is a sect of funds that slashed their entire stakes in the third quarter. Interestingly, Brandon Haley’s Holocene Advisors said goodbye to the largest stake of the 750 funds monitored by Insider Monkey, valued at about $36.7 million in stock. Noam Gottesman’s fund, GLG Partners, also sold off its stock, about $14.7 million worth. These transactions are important to note, as total hedge fund interest was cut by 4 funds in the third quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as KeyCorp (NYSE:KEY) but similarly valued. We will take a look at Fresenius Medical Care AG & Co. KGaA (NYSE:FMS), Baker Hughes Company (NASDAQ:BKR), W.W. Grainger, Inc. (NYSE:GWW), Live Nation Entertainment, Inc. (NYSE:LYV), Ingersoll Rand Inc. (NYSE:IR), Steris Plc (NYSE:STE), and The Cooper Companies, Inc. (NYSE:COO). This group of stocks’ market values match KEY’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FMS | 4 | 231694 | -1 |
| BKR | 37 | 1013933 | -3 |
| GWW | 28 | 306060 | -1 |
| LYV | 47 | 1308167 | 7 |
| IR | 33 | 732834 | 2 |
| STE | 34 | 1733011 | -1 |
| COO | 37 | 1403322 | 4 |
| Average | 31.4 | 961289 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.4 hedge funds with bullish positions and the average amount invested in these stocks was $961 million. That figure was $399 million in KEY’s case. Live Nation Entertainment, Inc. (NYSE:LYV) is the most popular stock in this table. On the other hand Fresenius Medical Care AG & Co. KGaA (NYSE:FMS) is the least popular one with only 4 bullish hedge fund positions. KeyCorp (NYSE:KEY) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for KEY is 61.7. 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. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. Hedge funds were also right about betting on KEY as the stock returned 16.9% since the end of Q3 (through 1/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
