Is JPMorgan Chase & Co. (NYSE:JPM) a good bet right now? We like to analyze hedge fund sentiment before doing days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy league graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments (for some reason media paid a ton of attention to Ackman’s gigantic JC Penney and Valeant failures) and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
When it comes to JPMorgan Chase & Co. (NYSE:JPM), prominent investors are getting less optimistic. The number of long hedge fund positions shrunk by 1 in recent months. JPM was in 98 hedge funds’ portfolios at the end of September. There were 99 hedge funds in our database with JPM holdings at the end of the previous quarter. 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 The Procter & Gamble Company (NYSE:PG), Pfizer Inc. (NYSE:PFE), and Anheuser-Busch InBev NV (ADR) (NYSE:BUD) to gather more data points.
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Follow Jpmorgan Chase & Co (NYSE:JPM)
Follow Jpmorgan Chase & Co (NYSE:JPM)
To most shareholders, hedge funds are perceived as underperforming, outdated investment tools of years past. While there are more than 8000 funds trading at the moment, Our experts choose to focus on the elite of this club, about 700 funds. It is estimated that this group of investors preside over the majority of the hedge fund industry’s total asset base, and by following their top picks, Insider Monkey has formulated a number of investment strategies that have historically exceeded the broader indices. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 12 percentage points annually for a decade in their back tests.
Now, let’s analyze the fresh action surrounding JPMorgan Chase & Co. (NYSE:JPM).
Hedge fund activity in JPMorgan Chase & Co. (NYSE:JPM)
At the end of the third quarter, a total of 98 of the hedge funds tracked by Insider Monkey were long this stock, down by 1% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Alex Snow’s Lansdowne Partners has the most valuable position in JPMorgan Chase & Co. (NYSE:JPM), worth close to $1.5957 billion, accounting for 13.8% of its total 13F portfolio. The second largest stake is held by Fisher Asset Management, led by Ken Fisher, holding a $925.2 million position; the fund has 1.6% of its 13F portfolio invested in the stock. Remaining peers with similar optimism consist of Boykin Curry’s Eagle Capital Management, Edgar Wachenheim’s Greenhaven Associates and Phill Gross and Robert Atchinson’s Adage Capital Management.
Judging by the fact that JPMorgan Chase & Co. (NYSE:JPM) has witnessed bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there were a few hedgies who sold off their positions entirely by the end of the third quarter. At the top of the heap, Robert Pohly’s Samlyn Capital cut the largest investment of all the funds tracked by Insider Monkey, worth an estimated $159.1 million in call options.. Ken Griffin’s fund, Citadel Investment Group, also dropped its call options, about $87.5 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 1 funds by the end of the third quarter.
Let’s check out hedge fund activity in other stocks similar to JPMorgan Chase & Co. (NYSE:JPM). We will take a look at The Procter & Gamble Company (NYSE:PG), Pfizer Inc. (NYSE:PFE), Anheuser-Busch InBev NV (ADR) (NYSE:BUD), and Royal Dutch Shell plc (ADR) (NYSE:RDS). This group of stocks’ market caps are similar to JPM’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PG | 71 | 20098044 | 15 |
| PFE | 83 | 5499374 | -11 |
| BUD | 32 | 5851359 | -3 |
| RDS | 34 | 955466 | -3 |
As you can see these stocks had an average of 55 hedge funds with bullish positions and the average amount invested in these stocks was $8.10 billion. That figure was $7.61 billion in JPM’s case. Pfizer Inc. (NYSE:PFE) is the most popular stock in this table. On the other hand Anheuser-Busch InBev NV (ADR) (NYSE:BUD) is the least popular one with only 32 bullish hedge fund positions. Compared to these stocks JPMorgan Chase & Co. (NYSE:JPM) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
