Do Hedge Funds Love Fiserv, Inc. (FISV)?

Does Fiserv, Inc. (NASDAQ:FISV) represent a good buying opportunity at the moment? Let’s briefly check the hedge fund sentiment towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail unconceivably on some occasions, but their stock picks have been generating superior risk-adjusted returns on average over the years.

Fiserv, Inc. (NASDAQ:FISV) investors should be aware of a decrease in enthusiasm from smart money in recent months. FISV was in 21 hedge funds’ portfolios at the end of the third quarter of 2015. There were 22 hedge funds in our database with FISV positions at the end of the previous quarter. At the end of this article we will also compare FISV to other stocks including Aviva Plc (ADR) (NYSE:AV), NXP Semiconductors NV (NASDAQ:NXPI), and The Hershey Company (NYSE:HSY) to get a better sense of its popularity.

Keeping this in mind, we’re going to take a look at the latest action encompassing Fiserv, Inc. (NASDAQ:FISV).

Hedge fund activity in Fiserv, Inc. (NASDAQ:FISV)

At Q3’s end, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of -5% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their stakes significantly (or already accumulated large positions).

Of the funds tracked by Insider Monkey, AQR Capital Management, managed by Cliff Asness, holds the biggest position in Fiserv, Inc. (NASDAQ:FISV). AQR Capital Management has a $84.5 million position in the stock, comprising 0.2% of its 13F portfolio. The second largest stake is held by Michael Lowenstein of Kensico Capital, with a $65.4 million position; the fund has 1.4% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish encompass Panayotis Takis Sparaggis’ Alkeon Capital Management, John Armitage’s Egerton Capital Limited and Phill Gross and Robert Atchinson’s Adage Capital Management.

Seeing as Fiserv, Inc. (NASDAQ:FISV) has experienced declining sentiment from the entirety of the hedge funds we track, logic holds that there is a sect of hedge funds that slashed their positions entirely in the third quarter. It’s worth mentioning that Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners dumped the biggest investment of the 700 funds watched by Insider Monkey, worth close to $1.7 million in call options. Glenn Russell Dubin’s fund, Highbridge Capital Management, also said goodbye to its call options, about $1.5 million worth. These transactions are important to note, as aggregate hedge fund interest fell by 1 funds in the third quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Fiserv, Inc. (NASDAQ:FISV) but similarly valued. We will take a look at Aviva Plc (ADR) (NYSE:AV), NXP Semiconductors NV (NASDAQ:NXPI), The Hershey Company (NYSE:HSY), and United Continental Holdings Inc (NYSE:UAL). This group of stocks’ market caps are closest to FISV’s market cap.

As you can see these stocks had an average of 38.5 hedge funds with bullish positions and the average amount invested in these stocks was $1656 million. That figure was $361 million in FISV’s case. United Continental Holdings Inc (NYSE:UAL) is the most popular stock in this table. On the other hand Aviva Plc (ADR) (NYSE:AV) is the least popular one with only 7 bullish hedge fund positions. Fiserv, Inc. (NASDAQ:FISV) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard UAL might be a better candidate to consider a long position.