The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31st. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Truist Financial Corporation (NYSE:TFC).
Truist Financial Corporation (NYSE:TFC) has seen a decrease in support from the world’s most elite money managers lately. Truist Financial Corporation (NYSE:TFC) was in 36 hedge funds’ portfolios at the end of March. The all time high for this statistic is 45. Our calculations also showed that TFC isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Clint Carlson of Carlson Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best battery 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. 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 homepage. Now we’re going to take a glance at the key hedge fund action regarding Truist Financial Corporation (NYSE:TFC).
Do Hedge Funds Think TFC Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 36 of the hedge funds tracked by Insider Monkey were long this stock, a change of -10% from the fourth quarter of 2020. By comparison, 34 hedge funds held shares or bullish call options in TFC a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Diamond Hill Capital, managed by Matthew Stadelman, holds the largest position in Truist Financial Corporation (NYSE:TFC). Diamond Hill Capital has a $406.1 million position in the stock, comprising 1.6% of its 13F portfolio. Sitting at the No. 2 spot is Select Equity Group, managed by Robert Joseph Caruso, which holds a $125 million position; 0.5% of its 13F portfolio is allocated to the stock. Remaining professional money managers that hold long positions consist of Renaissance Technologies, D. E. Shaw’s D E Shaw and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Soapstone Capital allocated the biggest weight to Truist Financial Corporation (NYSE:TFC), around 5.19% of its 13F portfolio. Diamond Hill Capital is also relatively very bullish on the stock, setting aside 1.64 percent of its 13F equity portfolio to TFC.
Judging by the fact that Truist Financial Corporation (NYSE:TFC) has faced declining sentiment from the aggregate hedge fund industry, we can see that there was a specific group of money managers that elected to cut their positions entirely last quarter. Interestingly, William Harnisch’s Peconic Partners LLC dumped the biggest investment of all the hedgies tracked by Insider Monkey, comprising close to $7.2 million in stock, and Peter Seuss’s Prana Capital Management was right behind this move, as the fund dumped about $7.1 million worth. These moves are interesting, as total hedge fund interest was cut by 4 funds last quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Truist Financial Corporation (NYSE:TFC) but similarly valued. We will take a look at The Bank of Nova Scotia (NYSE:BNS), China Petroleum & Chemical Corp (NYSE:SNP), FedEx Corporation (NYSE:FDX), Zoetis Inc (NYSE:ZTS), Crown Castle International Corp. (REIT) (NYSE:CCI), The PNC Financial Services Group Inc. (NYSE:PNC), and Duke Energy Corporation (NYSE:DUK). This group of stocks’ market caps are similar to TFC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BNS | 19 | 239536 | 0 |
| SNP | 11 | 210183 | -2 |
| FDX | 63 | 2263772 | 0 |
| ZTS | 58 | 3124680 | -3 |
| CCI | 43 | 1995629 | 3 |
| PNC | 39 | 418919 | 4 |
| DUK | 34 | 602208 | -4 |
| Average | 38.1 | 1264990 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 38.1 hedge funds with bullish positions and the average amount invested in these stocks was $1265 million. That figure was $846 million in TFC’s case. FedEx Corporation (NYSE:FDX) is the most popular stock in this table. On the other hand China Petroleum & Chemical Corp (NYSE:SNP) is the least popular one with only 11 bullish hedge fund positions. Truist Financial Corporation (NYSE:TFC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for TFC is 49. 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 negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 19.3% in 2021 through June 25th and surpassed the market again by 4.8 percentage points. Unfortunately TFC wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); TFC investors were disappointed as the stock returned -3% since the end of March (through 6/25) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
Follow Truist Financial Corp (NYSE:TFC)
Follow Truist Financial Corp (NYSE:TFC)
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Disclosure: None. This article was originally published at Insider Monkey.
